The founder and CEO of Galaxy Digital Capital Management, Michael Novogratz, recently announced on Fox that the of cryptocurrency prices had reached their bottom.
Cryptocurrencies like bitcoin have experienced a massive drop of around 51% since the start of 2018. Bitcoin has currently undergone a 1% boost in price.
Novogratz first Bitcoin investment
Novogratz first invested in bitcoin when its value was around US$ 96. The current price of bitcoin is around US$ 6,700. When asked about his experience at the time, he stated:
“When I looked at it then, I thought here’s this cool new technology that answered a call. At which point, people were upset with the institutions of the world. At that point, QE2 has started, and you were printing money. People thought there would be a debasement of FIAT currency and this was a new way of creating a digital store of value”.
He expressed his liking towards the fact that there was a bunch of people like libertarians that wanted to live off the grid or were sick of the government. It was around the time when the Chinese were buying, and it was global.
He assumed it was a speculative investment but learned over time that it was a revolution and not a risky venture. He further conveyed that people now have Bitcoin which is the first digital store value and everything else which is actually ‘Web 3.0’. It can result in the rebuilding of how the internet works.
Will Bitcoin become a FIAT currency or remain as a digital store value?
Many people including Novogratz believes that Bitcoin will remain as a digital store value. Any currency needs to have stability. The US dollar or British pounds might move 10% within the decade. Bitcoin has experienced an increase of 60% in 2018. Therefore, currencies heed to have stability.
It is one of the reasons why fixed supply currencies never work. They are too easy to squeeze assuming that their prices increase. Gold has a US$ 8 trillion market cap, and Bitcoin has a US$ 116 billion market cap. Therefore, it would make more sense, once mass adoption kicks in, for all these youths, when they get older, to achieve clarity and think about how it would be more logical to have a digital store value than gold which sits in the safe.
Can Bitcoin bounce back?
Novogratz announced at Yahoo Finance’s second annual “All Markets Summit” that Bitcoin has undergone a “classic speculative global mania” in 2016-2017, but has since seen improvement because the market has hit with “seller fatigue” recently.
The Galaxy Digital’s cryptocurrency index showed that the cryptocurrency market had reached its bottom. The sell-off was over 85% from its peak. Bitcoin price is currently at over US$ 6,700 while its dominance is at 51%. Bitcoin has quite clearly identified itself as a store of value.
There are a lot of FIAT currencies that are ready to make the jump to cryptocurrencies, specifically at venture funds. There are a few banks and financial institutions that have moved to cryptocurrencies, which might probably result in banks experiencing a Fear Of Missing Out (FOMO) on the crypto trend.