Large-scale liquidations of Bitcoin holders, Novogratz describes as "exaggerated fear"

Recent signals of instability are emerging in the cryptocurrency market. This is due to a chain reaction of asset liquidations by early investors, starting with the $9 billion Bitcoin sell-off facilitated by Galaxy Digital last year. This phenomenon is undermining the core belief of the Bitcoin community—the “HODLing” philosophy—and raising the possibility of a new cyclical market structure forming among participants. However, Galaxy Digital CEO Novogratz interprets the situation differently.

Changes in OG Investors’ Beliefs Shake the HODLing Philosophy

As early investors who have held Bitcoin since the Satoshi era accelerate their asset liquidations, their changing beliefs are significantly impacting the market. The sale of over 80,000 Bitcoins (about $9 billion) in July 2025 was one of the largest transactions ever and is seen as more than just a financial planning move—it symbolizes a weakening of the “HODLing” conviction.

Novogratz pointed out this trend directly during a earnings call. “It’s realistic that early OG holders are taking profits. Once some start selling, others will sell a bit more, and then even more,” he explained. His observation captures a shift in market sentiment beyond individual trades.

The longstanding “never sell” religious belief that has supported the Bitcoin community is beginning to crumble, raising concerns about the formation of a new market cycle. Novogratz warned, “As the enthusiasm cools and some selling begins, it becomes very difficult to maintain the HODLing philosophy.”

Is Quantum Threat a Real Concern? Novogratz’s Perspective

Meanwhile, some Wall Street strategists and firms are citing quantum computing as a reason to sell Bitcoin. Christopher Wou, head of global equity strategy at Jefferies, reduced Bitcoin allocations by 10% citing quantum threats, and Coinbase also views quantum computing as a tangible risk to the crypto market. The Ethereum Foundation has even elevated post-quantum security to a strategic priority, spreading quantum fears across the industry.

However, Novogratz dismisses these concerns as “exaggerated fears.” He stated, “Quantum technology has often been used as a big excuse, but in the long run, I don’t think quantum tech will pose a major problem for cryptocurrencies.” He further emphasized, “Bitcoin can handle this adequately.”

His assessment is grounded in technological reality. Experts agree that practical quantum computers capable of threatening Bitcoin’s encryption do not yet exist, and it will likely take decades for such technology to become a reality.

Galaxy CEO on Bitcoin’s Resilience

Novogratz highlights Bitcoin’s ability to adapt to quantum threats. “As quantum technology advances, quantum resistance will also strengthen, and the Bitcoin code will be updated in time,” he explained. This reflects confidence that the Bitcoin ecosystem can proactively respond to technological evolution.

Ultimately, Novogratz’s core message is this: While quantum computing could impact the entire industry in the long term, Bitcoin can overcome these challenges through timely technical adjustments. Therefore, current quantum fears do not justify investor sell-offs.

The market dynamics are complex—profit-taking by OG investors, spreading quantum concerns, and chain reactions of asset liquidations are intertwined. Whether Novogratz’s view is correct will be revealed over time.