- The forced deleveraging that's weighed on the crypto market in the last quarter is over, Mike Novogratz said.
- He thinks the crypto market has reached equilibrium and is awaiting new narratives in the space.
- Bitcoin is still an attractive asset amid macroeconomic uncertainty, Novogratz said.
Billionaire bitcoin bull Mike Novogratz believes the forced deleveraging of the cryptocurrency market is over and that investors can expect new narratives to shape the space following a brutal quarter for digital assets.
His optimism comes after a rocky year for crypto investors, following the crash of the Terra stablecoin and the related Luna token, which set off a domino effect of losses and bankruptcies across the sector. Crypto has enjoyed a few rallies since then, but the bitcoin and ethereum are still down around 60% from their November highs.
"We had a forced deleveraging that happened because of a lot of imprudent credit policies at lots of places, that I think exacerbated how bad the move would be," Novogratz said in an interview with CNBC.
But Novogratz thinks that the cycle is ending, with the potential for more positive change in the crypto market to come this quarter.
"The worst is over," he said of last quarter's big sell-off. "There is no more forced deleveraging that's going to happen. And so now, the market hits an equilibrium, and it waits for new narratives."
Developments like ethereum's upcoming merge could be a big narrative shift for the market, one that generates renewed enthusiasm among investors, Novogratz said. The merge is one out of five planned updates to the ethereum blockchain, CoinDesk reported, and will switch the blockchain over from a proof-of-work to a proof-of-stake system to increase efficiency.
Bitcoin may also be on a new path, with Coinbase's recent partnership with BlackRock: "That's like a monumental announcement," Novogratz said.
Bitcoin's steady adoption in mainstream finance is keeping Novogratz bullish on the largest crypto by market cap. He added he was particularly optimistic about the outlook for the coin in the current economic climate.
"I think bitcoin remains a really good macro asset for an environment where the macro is pretty uncertain," Novogratz said.