Billionaire investor Mike Novogratz shared his latest thoughts on Bitcoin when he was interviewed by Michael Saylor, Co-Founder, Chairman, and CEO of MicroStrategy Inc, at the recent “Bitcoin for Corporations” event.
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.”
Novogratz started by introducing Galazy Digital:
“We’ve got Bitcoin and other coins on our balance sheet. We have over 90 venture investments in the space. We’ve invested in exchanges, in custody, in protocols, in the decentralized finance revolution, all across the space. We have a sales and trading business. So we’re big liquidity providers. We trade over a billion dollars a day in tokens, and so we’ll make deep markets to anyone who wants them.
“We have one of the biggest derivative businesses, selling structured products, doing derivatives for mining companies, other corporates who want to limit their risk or override strategies on their Bitcoin. We have an investment banking business, going to corporates — mostly corporates in the crypto company but not only — and providing expertise…
“And we have an asset management product: we have the only Mercer-rated Bitcoin fund. We have created the Bloomberg Galaxy crypto index which was supposed to be and I think will be the S&P 500 of the space… We’re launching an Ether fund right now, and we have a $300 million fund that invests in the virtual space — we call it Galaxy Interactive…“
As for his outlook on the price of Bitcoin, Novogratz had this to say:
“I think we’ve hit a tipping point in this network effect I talked about, and my base case is: if I look at Bitcoin as a percentage of gold, I think Bitcoin is going to be digital gold. I know a lot of people disagree with me. They’ll think, ‘No, it going to be money. It’s going to be the blockchains of all blockchains,’ I just don’t think so. I think it’s got a beautiful lane as a store of value. It was perfectly designed as a store of value…
“I think of it as, ‘What percentage of market cap is gold?’ We’re about 6% of the gold market cap. My sense is by the end of the year, we are easily 10%. So, that gets you to Bitcoin $55,000-$60,000. I know as soon as we get to 10, we’re going to say, ‘Well why 10? Why not 20?’ And when we get to 20, we’re going to be 50, and then we’re going to be 100.
“And so, I would be $60,000 end of this year, and I’m $500,000 probably by 2024-2025… It doesn’t happen overnight. It happens with more and more education, with more and more seminars like this, with more and more communities buying into the idea.“
Last Thursday (February 11), Novogratz commented on Twitter on two important pieces of crypto news.
First, with regard to Mastercard’s announcement on February 10 that it is “bringing crypto onto its network”, he said:
“The Mastercard news is huge. A few months ago it would have been all the crypto community would focus on for the ensuing month. Now we are getting so much good news it almost goes unnoticed. Let me repeat. It is huge news. Crypto adoption is here.“
As for the announcement by Bank of New York Mellon Corporation (“BNY Mellon”) on February 11 that it is building “a client-facing prototype that is designed to be the industry’s first multi-asset digital custody and administration platform for traditional and digital assets”, he said:
“If there was any doubt left that the institutional herd was coming, there shouldn’t be. welcome to the age of crypto.“
The cryptocurrency market cap is up by $150 billion in a day as numerous DeFi coins have exploded by double-digits. Bitcoin stands near $44,000.
After dumping below $41,000, bitcoin initiated an impressive leg up, resulting in tapping $44,000. Tokens from the decentralized finance space have charted even more notable gains in the past 24 hours, including a massive 30% surge from Uniswap.
Bitcoin Gained $3K in Hours
Unlike the previous weekends, this one wasn’t uneventful for BTC’s price. The cryptocurrency had just come off a bearish Friday in which it dropped by $4,000 in minutes following the latest FUD statement from China.
Bitcoin spent the Saturday aiming to recover most losses, but the bulls drove it as high as $43,000. Sunday, though, started with enhanced volatility once again.
BTC slumped by a few thousand dollars and dropped below $41,000 for the second time in two days. However, as the bears were preparing to take it further south to $40,000, the situation changed.
In just a matter of minutes, bitcoin spiked by roughly $3,000 and neared $44,000. In the following several hours, the asset went further and briefly exceeded the $44,000 mark. As of now, it has retraced slightly and stands just below it.
Bitcoin’s market capitalization has gone over $800 billion, while the dominance over the alts has declined to just above 42%.
DeFi Tokens Surge
Most larger-cap altcoins have mimicked BTC’s performance since late last week. Ethereum dumped hard yesterday again to below $2,800, but an 11% increase has driven it back to around $3,100.
Binance Coin (8%), Ripple (6%), Solana (9%), Polkadot (7%), Dogecoin (4.5%), Avalanche (8.5%), and Luna (6%) are well in the green. Interestingly, Cardano has gained just a modest 2.5% in a day, despite the multiple new partnerships coming from the project’s summit during the weekend.
The most substantial increases are coming from tokens related to the decentralized finance space. Uniswap leads the way with a massive 34% surge in a day. As a result, UNI has neared $25.
PancakeSwap (14%), Aave (16%), The Graph (14%), Compound (17%), SushiSwap (30%), and more follow. This could be related to the latest activities coming from China, as reports suggested that locals are now turning to DeFi products since the country banned cryptocurrency trading – once again.
Ultimately, the cryptocurrency market capitalization has increased by more than $150 billion since yesterday’s low, but it’s still beneath $2 trillion.
While Bitcoin (BTC) has remained volatile for most of September 2021, the developments taking place with the Bitcoin Lightning network are going strong.
As we know, the Bitcoin Lightning Network is a “layer 2” payments protocol designed atop the Bitcoin blockchain network. There’s an exponential growth in the Bitcoin Lightning Network capacity which has now surged past 2,9000 BTC, as per data on Glassnode.
This year of 2021, in particular, has been very strong considering the Bitcoin Lightning Network growth. Since the beginning of 2021, the Lightning Network capacity has surged by 160%, while the number of active nodes and the number of channels have grown nearly by 100%.
As of press time, the number of active nodes on the BTC Lightning Network is 15,697 while the number of active channels has shot past 73,000. On the other hand, some big companies like Twitter are looking forward to taking benefit of these developments.
Twitter Can Boost Lightning Network Use
Last week, Twitter announced the Bitcoin tipping feature making it one of the biggest BTC adoption news by a tech giant. Interestingly, Twitter will be leveraging the Bitcoin Lightning Network to facilitate payments and BTC tipping.
To facilitate its Bitcoin tipping feature, Twitter has partnered with payments application Strike built atop the Bitcoin Lightning Network. The Twitter announcement read:
“People can now seamlessly tip with Bitcoin using Strike – a payments application built on the Bitcoin Lightning Network that allows people to send and receive Bitcoin.
People in the eligible markets will have to sign up for a Strike account and add their Strike username to receive Bitcoin tips over the Lightning Network. You can use any Bitcoin Lightning wallet to send tips to someone’s Strike account”.
As Bitcoin adoption continues to increase, the Bitcoin Lightning network will play a crucial role in increasing the Bitcoin utility. The participation of such big players will further boost the adoption curve.
While Bitcoin can continue growing to become the “digital gold,” Ethereum has the ability to be the “digital silver,” according to Marion Laboure.
Marion Laboure – Macro Strategist at Deutsche Bank – believes bitcoin has the potential to become the “digital gold” of this century. However, she expects the cryptocurrency’s price to be “ultra-volatile” in the next few years.
Laboure also praised Ethereum’s use cases, labeling the asset as the “digital silver.”
BTC – The Gold of The Future
According to Marion Laboure – Analyst and Macro Strategist at Deutsche Bank – Bitcoin possesses all the necessary qualities to step in when the world suffers from rising inflation, doubt, and fear due to the COVID-19 pandemic and the governments’ actions. As its supply is fixed (there will be no more than 21 million BTCs in existence), she stated that the asset could be a successful choice as a protection against the growing inflation.
The increased control by authorities over the population could be another factor that would make bitcoin attractive to the people. Laboure reminded that in such cases, throughout the years, humankind has turned towards assets that were not under the governments’ jurisdiction, such as gold. With that said, the executive believes BTC could become the “21st-century digital gold.”
It is worth noting that Deutsche Bank had a different opinion on the matter in the recent past. Last year, a report from the German multinational investment bank stated that bitcoin’s high volatility is an obstacle that makes the digital asset not a “reliable source of value.”
According to Laboure, though, BTC’s enhanced fluctuations would not last forever. The asset remains “risky” as of the moment and could be “ultra-volatile in the foreseeable future” but just like gold, which has also experienced this issue, BTC would eventually overcome it.
While bitcoin is the pioneer in the crypto space and the largest digital asset by market capitalization, Laboure also praised Ethereum’s merits. She pointed out that it is more than a cryptocurrency as it offers many applications and use cases such as decentralized finance (DeFi) projects.
In fact, most of the trendy non-fungible tokens (NFTs) are part of the Ethereum blockchain and she noted ETH could be the “digital silver.”
Laboure concluded that no other cryptocurrency would become stronger than Bitcoin or Ethereum in the next five years.
Deutsche Bank’s strategist also spoke about the disadvantages of the cryptocurrency space with lack of regulation being the main one. She sees the industry much more settled once this issue gets solved. The environmental concerns that crypto mining causes are the other big hurdle:
“In one year, Bitcoin uses around the same electricity as the entire population of Pakistan (c.217M people),” she reminded.
This has been a growing concern this year, but the number of companies and parties aiming to solve it has increased exponentially as well. For instance, several leading cryptocurrency exchanges have already launched initiatives that would make them carbon neutral, including FTX, BitMEX, and Gemini.
CBDCs, Cash, And Crypto
Laboure also gave her two cents about central bank digital currencies. She prefers decentralized cryptocurrencies saying that the centralized nature of the CBDCs would not be attractive to society. In any case, she believes both assets together with cash would successfully co-exist in the economic network.
On another note, Deutsche Bank’s CIO, Christian Nolting, opined somewhat differently on the matter. Back in May, he said that the impending launch of CBDCs would be a major threat to bitcoin in terms of serving as a currency:
“A widespread introduction of CBDCs accompanied by higher regulation of cryptocurrencies could create a more challenging environment for crypto assets as some of their advantages compared to traditional financial assets would fade in the longer term.”