Mike Novogratz, a crypto entrepreneur and former hedge fund manager, has raised billions of dollars by making aggressive bets on digital assets.
It has transformed its crypto-ecosystem company Galaxy Digital (TOX: GLXY) into something akin to crypto firm Berkshire Hathaway (NYSE: BRKa) (if there is a crypto equivalent) through investments in promising blockchain projects and triggered a record high $1,200 million from the acquisition of security giant Pete Joe, Yahoo Finance (Nasdaq: AABA) reported.
Similar to how stock investors are turning to Warren Buffett from Berkshire, Novogratz has established himself as one of the voices that crypto investors often look to for their next big decision.
“Well, I am the oldest man in the crypto space,” Novogratz joked in an exclusive interview with Yahoo Finance at the Bitcoin 2021 conference held in Miami last weekend.
To explain the 30% selloff that hit bitcoin last May, in the currency’s worst month, Novogratz first outlines what he says fueled the big race to start the year pointing to institutional buyers. .
Novogratz said; “Institutional money is very important. Let me give you some numbers: the total market capitalization of cryptocurrencies, that is, bitcoin and other currencies, is about one and a half trillion dollars.” That’s 30 basis points of total global wealth, 30 basis points, nothing. For that to change to 2%, 3%, and I’m basically convinced it’s going to happen, institutions are needed. They have all the money.”
Novogratz also argues that many companies, institutions, and hedge funds piled up around the $9,000 level when hedge fund manager Paul Tudor Jones first presented his investment thesis and argued the case for the use of “digital gold”, i.e. Bitcoin, in May 2020.
“A year later, the number reached 60,000, and the drive to earn cash became so human that it happened,” he said. “And then we see these kinds of step function moves, and then we’re going to see a long period of consolidation… and you wait for the new trend to arrive that brings the next wave of money. I think we’re in one of those periods now.”
One catalyst that Novogratz identified as a potential narrative shift was the Securities and Exchange Commission’s eventual approval of a Bitcoin ETF. Currently there are more than 10 applications being approved, one of which is from Galaxy Digital itself.
Bitcoin ETF?
In previous comments to Yahoo Finance, Novogratz made it clear that he was pleased with the appointment of Gary Gensler as Chairman of the Securities and Exchange Commission and predicted that he would agree to create a Bitcoin ETF by the end of the year.
“The great wealth in America is the people in their 50s and 80s, who usually work through RIAs, registered investment advisors,” Novogratz said. “They are slower to buy, the trend is starting, and the ETF makes it easier.” . “And yes, if we had an ETF tomorrow, the price would go up.”
“I don’t think all regulations are bad, I think we need good regulation. Gary Gensler is a smart guy. I’m sure he’ll come up with smart regulations,” Novogratz said, adding that it could help attract more capital into the decentralized finance arena. decentralization). “In fact, I think one of the big surprises in the next five years is how quickly decentralized finance is taking off.”
Of course, this may be a bad omen for conventional banks and lending institutions. As Jamie Dimon, CEO of JPMorgan (NYSE: JPM) concluded in his letter to shareholders earlier this year, non-bank competitors were able to operate more flexibly with no additional regulatory hurdles to overcome, it concluded. To Yahoo Finance.
