Mike Novogratz. Source: a video screenshot, Youtube, ConsenSysMedia

Although the recent crypto market sell-off may have been bad for those who bought at high levels, and may even scare off new potential investors, it certainly isn’t game over for crypto as an asset class, according to Mike Novogratz. He also urged to avoid getting in too early in an asset that is falling.

The ex-investment banker and now CEO & Founder of the digital asset merchant bank Galaxy Digital made the remarks in an interview on Anthony Pompliano’s Pomp Podcast on Monday, where he also said that he believes the sell-off means that crypto adoption will be set back 12 to 18 months.

“This probably sets the story, the narrative, of bitcoin as a store of value […] back 12 to 18 months […] We’re going to have to get through this, and then we’re going to have to rebuild confidence,” Novogratz explained.

@pierre_rochard @novogratz Back? Who has lost confidence? Fundamentals didn’t change overnight, just a worldwide pa… https://t.co/mg4UWYgRwg — Zany ₿east 🦖 (@JPloegman)

Further, he also said that in hindsight, this situation can be considered “one of the greatest deflationary impulses we’ve ever seen in our lives.” And since both crypto and gold are widely thought of as hedges against inflation, a period of deflation will mean lower prices for those assets. “We might look back and say that this move in gold and bitcoin wasn’t as irrational as it felt,” Novogratz said.

However, he then added that the deflation is most likely just temporary, saying “I personally think we’re going to have a brief period of deflation, and you’re stoking the fires for inflation, because I think the economy will come back faster than you think […] and there’s going to be a ton of liquidity.”

During the wide-ranging interview, which touched on everything from crypto to the coronavirus and its impact on the broader economy, Novogratz also said that he expects the U.S. government to come up with unprecedented fiscal measures in order to keep the economy going. Among these measures may be “a form of universal basic income] for people that need it,” he said while arguing that Hong Kong has already done it.

Another lesson Novogratz shared in the interview, and one that he said he often uses himself, is to avoid getting in too early in an asset that is falling, even when prices look cheap.

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“The biggest mistake that people make is that, when a market breaks, everyone thinks it’s time to get back in way too early. Shit always gets worse than you think it’s going to,” Novogratz said, before adding:

“I sometimes make the mistake, but I tell myself ‘hey, when you want to buy something, go on a long walk, then come back a week later and look at it,’ and it’s usually worse off. Once they start going bad, they kind of stay bad for a while.”

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Learn more: 10 Crypto Minds Weigh in On Post-Crash Bitcoin and Its Future

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