Billionaire Mike Novogratz on BTC: “Stay Long”

If Michael Novogratz, a cryptocurrency bull and former Wall Street hedge fund manager, knew then what he knows now, he might not have listed Galaxy Digital, a cryptocurrency-fueled merchant bank, on Canada’s TSX Venture Exchange with the bitcoin price trading below $8,000. When he launched Galaxy Digital at year-end 2017, the bitcoin price was marching toward its peak of almost $20,000, and the listing was started “in January when the public market was hot,” Novogratz told Bloomberg. But a series of regulatory delays and declines have led to a shift in the market dynamics since he first embarked on the listing.

Despite the mixed market on the firm’s TSX debut, Novogratz remains bullish on bitcoin, seemingly now more than ever. He is honed in on bitcoin’s dominance index, which according to CoinMarketCap hovers at nearly 48%. Novogratz tweeted:

He also tweeted that he is “excited” about the Canadian transaction and touted the firm’s mission, which is to “institutionalize the space.”

Tale of Two Cities

In an interview with Bloomberg in recent days, Novogratz described what he characterized as a “tale of two cities” comprised of “soft” trading in cryptocurrencies coupled with a “raging bull market” in ICOs and private equity deals in the space, pointing to “tons of money pouring into venture capital funds” where “Silicon Valley has become Crypto Valley.”

Indeed, recent data published in Forbes reveals that the nascent ICO market generated 45% of the funds raised in the more mature and traditional IPO market in the second quarter of 2018. For a market that only has three years of history behind it compared with an IPO market that dates back to the 17th century with the Dutch East India Company, it’s clear why Novogratz is bullish on cryptocurrencies.

The contrast in the bitcoin price and ICO demand could be chalked up to the ease in which institutional investors can gain exposure to an illiquid venture fund that backs blockchain startups like Andreessen Horowitz than it is for them to purchase individual cryptocurrencies, he explained. For hedge funds and other big investors, the custody solutions that will keep their funds secure are still lacking, and the volatility in the cryptocurrency prices is daunting for first-time buyers.

Also, if you examine anecdotal evidence in crypto, it’s a “raging bull market in people entering the space,” Novogratz said, adding that the talent entering the space is similarly robust. He is also encouraged by the number of participants at industry conferences, such as a recent event in Hong Kong where 15,000 crypto enthusiasts attended RISE Hong Kong and the Beyond Blocks Summit in Seoul, where he said he had his selfie taken dozens of times.

Novogratz’s Galaxy Digital was taken public in Canada via a reverse takeover involving First Coin Capital and Bradmer Pharmaceuticals.

Featured image courtesy of Shutterstock.

Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.