Former hedge fund manager Novogratz is the Founder and CEO of Galaxy Digital, “a diversified financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sector.”
Sorkin started by asking Novogrtaz if he agreed that money was being moved out of traditional assets like gold and into digital plays like Bitcoin and how meaningful this is.
“It’s meaningful, but it’s not the real story. The real story is adoption of Bitcoin, adoption of crypto across a vast variety of accounts… it’s just a litany of institutional investors that are changing their mind or are realizing that now’s the time. There is enough liquidity for Bitcoin be part of it.”
Sorkin then pointed out to Novogratz that not all institutional investors are buying actual Bitcoin and that in fact it seems that they might mostly be buying it indirectly via shares of the Grayscale Bitcoin Trust (GBTC). (GBTC is available via traditional brokerages rather than crypto exchanges.)
“Yeah, listen, if Bitcoin was easy to buy, the price would have been a lot higher, and so Grayscale Trust was a very interesting way for people to get ETF-like exposure. It’s not an ETF, but it’s like an ETF… and so that’s the easier route.
“You’re seeing more and more now institutional pathways, but we have a fund. There are plenty of other funds that are geared towards institutions, and we’re seeing activity in those funds start to pick up as well…
“The big hedge funds are going to end up buying Bitcoin themselves, and they’re going to custody it… And so, you’re seeing the evolution of this industry, and it is speeding up in an accelerated fashion.”
— Squawk Box (@SquawkCNBC) December 1, 2020