Mike Novogratz, the billionaire investor who once called himself the “Forrest Gump of Bitcoin,” said the recent turbulence in the cryptocurrency industry is a “full-fledged credit crisis” and acknowledged that he was “darn wrong” about the magnitude of the leverage in the system.

“What I don’t think people expected was the magnitude of losses that would show up in professional institutions’ balance sheets and that caused the daisy chain of events,” Novogratz said at the Bloomberg Crypto Summit Tuesday. “It turned into a full fledged credit crisis with complete liquidation and huge damage on confidence in the space.”

The founder of Galaxy Digital Holdings Ltd., who was a big promoter of Terraform Labs, the company behind Terra and Luna, said the lesson learned from the collapse of the stablecoin was that both the industry and retail investors “really had very, very little concept of risk management.”

Bitcoin has plunged since its peak last year, trading in a $19,000 to $22,000 range as investors reel from a rout that coincided with a slumping stock market and has been exacerbated by implosions across the industry.

TerraUSD, or UST, lost its peg to the dollar in May and, along with its digital coin counterpart Luna, saw almost all of its value disappear. It sparked what is being called a “crypto winter,” with Celsius and Babel, as well as hedge fund Three Arrows Capital, dragging down the industry.

Novogratz blamed regulators for not doing enough to protect investors and allowing institutions to take on a huge amount of leverage. He compared the crypto fall-out to the collapse of Lehman Brothers in the financial crisis, and called for more transparency and disclosure in the industry.

“I don’t know what the SEC should have done, or could have done or might have done, but they didn’t do a lot to protect the retail investors,” Novogratz said.

Other Highlights:

• Novogratz said his heart doctor recently lost $1 million in the collapse of Celsius.
• He said the “worst is over” in the crypto industry and that while the current issues may have increased distrust among retail investors, the argument for • Bitcoin is still strong, particularly as central banks around the world fight inflation.
• He called Bitcoin an “anti-populist” asset that will increase in value in part because politicians in both parties spend too much.
• He credited Senator Joe Manchin for rejecting more government spending.
• He predicted Bitcoin will eventually reach $500,000.

This article was provided by Bloomberg News.