'Most crypto hedge funds may fail'

Two-thirds of the hedge funds that invest in cryptocurrencies will fail as a consequence of the current market downturn, Mike Novogratz, the founder and chief executive officer of Galaxy Digital, said.

"Volume will go down, hedge funds will have to restructure," Novogratz said at the Piper Sandler Global Exchanges & Brokerage Conference in New York. "There are literally 1,900 crypto hedge funds. My guess is two-thirds will go out of business."

The former Fortress Investment hedge fund manager cited the broader financial market's reaction to the removal of stimulus by the US Federal Reserve as the reason for the collapse in token prices over the past six months. Bitcoin has dropped more than 50 percent from a record high reached in November.

Novogratz also attributed last month's collapse of the Terra blockchain - in which he and Galaxy were investors - to the broader macroeconomic factors rather than to flaws in the project.