Michael Novogratz, the former macro manager who’s been one of the biggest champions of bitcoin, shelved plans to start a cryptocurrency hedge fund and predicted that the digital money may extend its plunge to US$8,000.

"We didn’t like market conditions and we wanted to re-evaluate what we’re doing," Novogratz said in a phone interview. "I look pretty smart pressing the pause button right now."

Novogratz was set to start his Galaxy Digital Assets Fund on Dec. 15 and had investors lined up for the venture. He called clients on Dec. 13 and told them he changed his mind, Novogratz said Friday. He cited a growing number of hurdles, including the prospect of buying bitcoin or ether for clients while also selling crypto investments in his personal account.

"I didn’t want to have to deal with the schizophrenic emotional side of it," Novogratz said. "There are just so many conflicts in that business. It was going to be more complicated than I wanted."

While Novogratz previously called cryptocurrencies ‘the biggest bubble of our lifetimes,’ he isn’t giving up on them and still believes they’ll be a disruptive force in finance.

Bitcoin’s plunge extended to almost 30 percent Friday as the frenzy surrounding digital currencies faced one of its biggest tests yet. Other cryptocurrencies including ethereum and litecoin also tumbled.

Bitcoin dropped Friday to as low as US$10,776, before recovering to US$12,756 at 1:22 p.m. in New York. It last traded below US$10,000 on Dec. 1, when the U.S. Commodity Futures Trading Commission agreed to allow trading in bitcoin futures.