Mike Novogratz Argues that Bitcoin Will Eventually Become Digital Gold
Originally published on: CoinSpeaker
Read the original article
February 14, 2019
Bitcoin bull Mike Novogratz is never shy when expressing his optimism about Bitcoin (BTC). The former Goldman Sachs partner and founder of Galaxy Digital Bank believe BTC occupies a unique segment in crypto land. He named the digital currency as ‘digital gold.’ Also, he said that its role in the cryptocurrency market is comparable to that of gold on the periodic table.
Novogratz made these remarks during an exclusive interview with Bloomberg TV on February 13. He was speaking on the sidelines of the Milken Institute MENA Summit taking place in Abu Dhabi. He also elaborated on some of the reasons that he believes the Crypto Winter is coming to an end.
The arrival of more institutional investors in the nascent marketplace may boost the crypto recovery. As we reported earlier, Novogratz encourages all the Macro Funds to hold at least a small percentage, 1%, in Bitcoin. Generally, analysts expect Bitcoin and the entire cryptocurrency market to start recovering in the latter half of 2019.
Reflecting on the propagation of crypto assets Novogratz argued that:
“There are 118 elements on the periodic table and only one gold. Bitcoin is going to be digital gold, a place where you have sovereign money, it’s not U.S. money, it’s not Chinese money, it’s sovereign. Sovereignty costs a lot, it should.”
Asked about his thoughts on Bitcoin, Novogratz repeated to state that the crypto remains the sovereign asset that can substitute gold as a store of value.
Not every crypto needs maximal security although the blockchain in principle provides a robust system for secure exchanges of value. Less valuable transactional cryptos may do better than digital gold to trade security for enhanced efficiency gains. Novogratz thinks that bitcoin is currently oscillating around its bottom after it settled around the $3,400-3,600 mark.
The institutional investors took their time before entering this market. The hesitation enabled them to make sure that they would not go for a falling knife. Due to this hesitation, Novogratz cut down price predictions to below $10,000 by 2018 year-end as we announced earlier. He noted that it is possible for the cryptocurrency to even break lower.
The crypto bull believes that 2019 is the rebound year. Fidelity’s custody solution together with other investment opportunities is all set to go live later in 2019. These developments may push the price up to $8,000 for the medium term. Novogratz believes that 2018 was the year when the crypto bubble burst.
Nonetheless, he thinks that the market will not bubble back up though it has potential to go higher. The uptrend is expected to form gradually with the institutional investors playing a fundamental role all through 2019.
He summarized by saying:
“If you look back at any market that has had these bubbles, it is going to bubble back up. We have kind of hit equilibrium in this $3,400 $3,600 zone. Could Bitcoin go down? Of course, it could. At this moment, it could go either way. But it feels like we are kind of just grinding along at the bottom, thus the next move could be considerably higher.”
Novogratz’s idea is shared by several established analysts like Netherlands-based Big Four auditor KPMG. The auditors said last fall that institutionalization of this market is essential to enhance scale and trust. Therefore, the markets are set to rise again with more and more institutional investors participating in it.