Mike Novogratz misses chance to short Litecoin in Walmart debacle

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(Kitco News) – Billionaire Mike Novogratz is kicking himself for not moving fast enough to short Litecoin on the fake Walmart news.

On Sept. 13, the Litecoin price shot up nearly 30%, from $183 to $233, in a sudden spike. Investors were buying on the rumor that Litecoin had inked a partnership with retail giant Walmart. The knee-jerk reaction was in response to a fake press release scammers managed to temporarily publish on GlobeNewswire.

Novogratz, a former hedge fund trader at Fortress Investment Group, said at the recent Salt conference that he knew something was off from the start:

“I scratched my head — like, who would buy Litecoin and why?”

The savvy trader did not move quick enough, however, to short the cryptocurrency in anticipation of the falling knife, which in hindsight was inevitable. Within minutes, Litecoin did a 180-degree turn, tumbling to as low as $171 before closing at $179.

“Made no sense to me. But I wasn’t quick enough to short it, and that, of course, turned out to be fraud,” said Novogratz.

It wasn’t just billionaires who did a double-take.

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Source: Twitter

To be fair, the Galaxy Digital chief didn’t have a lot of time to act. It was a matter of minutes before the cryptocurrency industry was on to the scam. Any partnership between Walmart and Litecoin must have been a lie. Sure enough, it didn’t take long for the Litecoin Foundation to rebuff the rumors and for Walmart to deny adopting the 15th biggest cryptocurrency.

Ed Moya, senior market analyst at Oanda Corp, recently told Kitco that the scammers likely chose the less popular Litecoin over high-profile cryptocurrencies such as Bitcoin, Ethereum and Dogecoin because they were trying to buy themselves some time. Any higher-profile cryptocurrency inking a deal with a name like Walmart would have sent off alarm bells immediately. Litecoin used to trade among the top 10 cryptocurrencies but became less relevant after the 2017 bull market run once founder Charlie Lee sold his holdings. Dogecoin co-creator Billy Markus poked fun at the chain of events.

 

Novogratz, who pointed out that fraud could happen in any industry as popular as crypto, hopes the bad actors are brought to justice.



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.


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