The Crypto Markets will ‘Flip Next Year’ — Mike Novogratz, CEO Galaxy Digital
Mike Novogratz, ex Goldman Sachs partner turned crypto believer, who founded Galaxy Digital (GD), has gone on record once more in a recent interview with the Financial Times (FT), predicting that the crypto currency markets will ‘Flip next year’ and ‘that’s when the price starts moving again’.
Galaxy Digital, which Novogratz hopes will become the “Goldman Sachs of crypto” has experienced a lot of pain in 2018 due to its dependancy on crypto being at the core of its business. This has seen the firms valuation drop by 37% since the beginning of August when it raised $242m.
“2017 was just fun, it was almost stupid” … ” this year has been challenging. It sucks to build a business in a bear market.”
GD offers a handful of products to its clients including advisory services, mergers, acquisitions and even direct investment. However its newer trading arm and asset management division appears to be taking priority, holding around $460m in assets, at least according to Galaxy’s own reports. In turn making GD the largest project of this kind within the crypto space to date. However, it’s been anything but smooth and with volatile swings in the valuation and status of investors funds Novogratz stated:
“Anxiety levels go up when crypto goes down,” … “In most traditional business, [such as] Goldman Sachs, you don’t worry. There’s not an existential threat out there.”
Novogratz’s faith seems unmoving however, having invested $302m of his own portfolio and despite GD losing over $200m in Q1 of 2018, $85m of which was due to the crash of the crypto markets. If GD is still holding onto its crypto assets, then the recent move below $6,000 may have wiped another 40% of the valuation from its crypto portfolio in what has been a brutal two weeks of trading.
According to the FT, Novogratz stills appeared unfazed even after this recent sell off and predicts that institutions will stop investing in cryptocurrency funds and begin to start investing into the currencies themselves directly in Q1 of 2019, as he added.
“You’ll see that flip next year,” … ‘that’s when the price starts moving again’
This is perhaps the the most conservative and vague prediction Mike Novogratz has made regarding crypto to date, especially when compared to his statement ealier in 2018 when he stated that Bitcoin could ‘Easily’ end the year with a price of $40,000 per coin. This was of course later revised as the markets developed to — ”Bitcoin won’t break (above) $9,000 this year”.
Novogratz also publicly went on record with a tweet where he said he believed $6,000 would be the bottom for bitcoin.
This time however, it appears empirical evidence is on Novogratz’s side as he points out, figures and companies within in traditional finance are joining the game. Jeff Sprecher, chief executive and chairman of the Intercontinental Exchange (ICE), which owns the New York Stock Exchange is launching Bakkt, a cryptocurrency exchange next year and Abigail Johnson, chief executive of the 6th largest fund management in the world, Fidelity, which holds $4.2tn worth of value on behalf of investors and are soon to be launching “Fidelity Digital Assets”.
Perhaps Mike Novogratz’s then may just be proven right this time, even as the markets continue to fall and negative sentiment increases there’s certainly truth in his statement:
“It’s easy to get sceptical but there’s something happening,”