During a recent interview with CNBC, Mike Novogratz argues that bitcoin will become gold. He also says that institutions will enter the market sooner rather than later. However, the market will build slowly and not enter the frenzy that occurred during 2017.
Institutions will enter the market and buy bitcoin
Bitcoin guru and industry expert Mike Novogratz recently expressed his optimism about cryptocurrencies and in particular bitcoin. He states that the turn will tide when institutions enter the market and that is already underway. A couple of months ago, Novogratz said that institutions would enter the market in Q1 – Q2 2019. When they enter the market, we will see new highs. Now, it is Q1 and institutions enter the market one after one. A few days ago, two pension funds anchored Morgan Creek’s crypto focused fund.
Other institutions that get closer to launching crypto related platforms or custody services are Nasdaq, Fidelity, Intercontinental Exchange, Stuttgart Boerse among others. Novogratz is optimistic about Crypto Winter coming to an end due to the entry of more institutional investors into the crypto industry. He says:
“There are four or five decent custody solutions. All of those custodians are working with institutions. Fidelity’s has 100, 200, 300 customers lining up to be customers. And so, they are not going to rush in on day one. They’re going to want to see the water run through the pipes. But over next six to twelve months you’re going to start seeing institutions contribute their assets, their money.”
The retail investors drove the bull-run in 2017, and now the money changes hands to institutions. He called complaints about institutions not entering the space as being a reason to doubt their interests rubbish. He adds:
“All the retail frenzy that came up and down washed out, and now you’re in this process of handing off ownership from the people’s revolution, from retail to institutions. All the architecture that institutions need to feel comfortable with this is being put in place.”
Bitcoin to become the new gold
While institutions might drive the whole cryptocurrency market higher, bitcoin will become digital gold. Mike has previously stated that bitcoin will stay above $3,000 for the foreseeable future. Because of the influx of institutional money, bitcoin will see record highs in 2019 according to the CEO of Galaxy Digital.
Novogratz also explained why he thinks bitcoin will become the new gold even though the market is down over 80 per cent. Bitcoin will be the place where you have sovereign money, and just like storing gold today, it is fine that bitcoin is slow and more costly than other cryptocurrencies.
“There are 118 elements on the periodic table; only one – gold – is valuable just because of its store of value. Bitcoin is going to be digital gold. We keep gold surrounded by guns and deep vaults. It costs money to store gold because gold is a store of value. So the idea that it’s supposed to be free and cheap is misguided. That’s what makes Bitcoin unique. It requires security that other cryptos don’t need.”
He is very optimistic about bitcoin long-term, but in the short term, the price can move up or down. While it could go lower, he thinks we have reached the bottom by stating:
“If you look back at any market that has these bubbles, it’s going to bubble back up. We’ve hit an equilibrium in this $3,400 $3,600 zone. Could Bitcoin go down? Of course, it could. It could go either way. But it feels like we’re just grinding along at the bottom so that the next move could be significantly higher. In the next run, we’re going to see it separate itself from a lot of other cryptocurrencies.”
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.