Pantera Capital and Novogratz Profited MILLIONS On LUNA Sales Right Before The Crash?• June 4, 2022 11:33 am • Comments
Uh oh folks…
Something smells in LUNA-ville!
As if things weren’t already bad enough with the LUNA and UST crash, are we about to see the other shoe drop?
What would be worse than seeing millions of dollars from small investors wiped out?
Well, it would sure add salt to the wound if the big funds just happened to profit and sell right before the crash.
Are they just that good?
We’re not speculating at ProCoinNews…it could be entirely above board and just excellence in investing or dumb luck or a combination of both, but boy it sure does look bad doesn’t it?
In a new video posted by AMTV, Christopher Greene claims that Pantera Capital and Mike Novogratz’s Galaxy Digital both made millions selling LUNA before the crash.
The big guys win again.
Here is a short clip from the larger video where Greene breaks it all down…watch it on Rumble here:
But it’s not just Greene’s opinion.
In fact, Greene is only reporting what he read in a CNBC article.
It’s real folks!
Let’s start first with the small investors (who did NOT get out before the crash)…CNBC reports the following:
The entire episode has laid bare the advantages of experienced large-scale investors over retail investors gambling on hope.
One person posted on Reddit that they didn’t think they would have enough money to pay for their next semester at school after losing money on luna and UST. Another investor affected by the crash tweeted that she and her husband sold their house and bet it all on luna, noting that she was still trying to digest whether it was actually happening or just a nightmare.
Others are contemplating suicide after losing all they’ve got.
“I’m lost, about to commit suicide in a chair,” one commenter posted to Reddit. “I lost my life savings in the investments of (LUNA UST) the worst thing is that 3 weeks ago I proposed to my girlfriend. She doesn’t know anything, I lost 62 thousand dollars. I’m here I don’t know what to do.”
Fairly terrible, right?
People losing entire life savings.
People contemplating suicide because of how much they lost.
But how did the big boys do?
Magical, it seems.
Read this stunning report from CNBC, which claims that Pantera CEO Dan Morehead was “talking his book” on CNBC — AT THE SAME TIME HIS FUND WAS SELLING OUT OF LUNA!
Who cashed out, and why
Among the winners of the UST flash crash are Pantera Capital, a hedge fund that saw a 100x return on its investment.
Joey Krug, the fund’s co-chief investment officer, told CNBC that in the primary fund where they held and traded luna, they sold about 87% of their position from Jan. 2021 through Apr. 2022. Pantera then sold another 8% in May once it was clear the UST peg had broken. At the end of it all, Krug says that Pantera “got stuck” with about 5% of their position.
All that liquidation translated to a return of $171 million on a $1.7 million initial investment, assuming the remaining luna they own continue to be worth nothing.
Even as the fund was selling, Pantera Capital CEO Dan Morehead joined CNBC in Dec. 2021 to talk about his top altcoin picks, which included the Terra blockchain’s luna token. At the time, luna was up more than 15,800% in 2021.
“We think it’s one of the most promising coins for the coming year,” Morehead said of luna. “So many people are just discovering it and just starting to trade it.”
But Krug says the firm’s initial decision to liquidate came down to risk management and rebalancing the fund.
“For the large portion which we sold over 2021 and part of 2022, it was a really simple risk management reason,” said Krug. “It kept becoming a larger and larger part of the fund and so we had to de-risk it since you can’t really run a liquid hedge fund with one position being a super large portion of the fund.”
When Pantera noticed the UST $1 peg breaking in May, it sold again.
“It was really just seeing the peg break by a few cents and pattern matching it to historical currency pegs,” continued Krug, who noted that generally when a currency breaks peg, it gets hammered. Even though the firm owned a bunch of luna as opposed to UST, when UST trades under its peg, the dynamic is such that more luna is minted, lowering the value of each coin overall.
“So basically, you want to sell it so you don’t end up getting diluted,” explained Krug.
Hong Kong-based venture firm CMCC Global was one of Terraform’s first seed investors back in early 2018.
Next CNBC covers Novogratz, who they say was selling Luna along the way and netted $355 million from its sales of Luna:
Then there’s Galaxy Digital, the crypto merchant bank founded by billionaire investor Mike Novogratz.
In a public letter addressed to “shareholders, friends, partners, and the crypto community,” Novogratz — who got a luna tattoo on his arm to memorialize his status as an official ‘Lunatic’ — opined on where the project went wrong, but also noted that Galaxy took profits along the way.
In its Q1 earnings filing, Galaxy noted that the largest contributor to its net realized gain on digital assets of $355 million was sales of luna.
Other major backers of Terraform Labs included some of the biggest names in venture capital, including Lightspeed Venture Partners and Coinbase Ventures. Three Arrows Capital and Jump Crypto bought into the luna token. CNBC has not learned how these firms fared.
Let me reiterate one more time that Pantera Capital and Novogratz’s Galaxy Digital may not have done anything wrong — it may just be solid, sound investing and risk management or dumb luck or a combination of both.
But isn’t it amazing how the big guys almost never lose?
More power to ’em, I guess.
If you’d like to hear more from AMTV’s Christopher Greene, I have his FULL VIDEO for you below.
It’s a really great and fascinating video.
I only have one comment to add: I don’t think “fade” means what he thinks it means when he says to “fade the big players”.
We’ve got your back CG, just flip the meaning around, you’re using it backwards.
But it’s a great video and worth your time to watch.
Check it out here:
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