In 2017, we’ve seen a number of crypto businesses pop up. This isn’t surprising considering the Wild West nature of cryptocurrencies then. In fact, those businesses that were struggling financially even made use of initial coin offerings in order to raise funds. For some, it has even been used as a scam. But in 2018, things changed as regulators decided to take action.
And since Bitcoin reached near $20K level in mid-December 2017, Bitcoin has lost more than 80% of its value. In addition to this, the same bearish sentiments were also experienced by other altcoins as well.
For Mike Novogratz who previously thought that Bitcoin bottomed at around $6,200 to $6,500, he believes that it is quite difficult to have a crypto business today considering the bear market. However, he still remains bullish regarding the future of the industry in the long term. Mike Novogratz was a former Goldman Sachs partner. He is also the founder of Galaxy Digital.
He mentioned that “2017 was just fun, it was almost stupid. (But) this year has been challenging. It sucks to build a business in a bear market…(staff) anxiety levels go up when crypto goes down…In most traditional business, (such as) Goldman Sachs, you don’t worry. There’s an existential threat out there”.
Trouble in Galaxy Digital?
Mike Novogratz has been reported to have been having problems in Galaxy Digital as company president Richard Tavoso and co-head of trading David Namdar left the company. The reason is for them to consult larger institutions. And also, it has been reported that Galaxy Digital has received a subpoena from US regulators, though it wasn’t confirmed by the company.
Bold Predictions Despite a Bearish Market
Mike Novogratz is known for his bold predictions despite a bearish market. He said that cryptocurrencies are going to “flip next year”. He thinks that financial institutions will decide to make their move in the industry by next year. He said that these institutional investors are going to transition from “investing in cryptocurrency funds to investing in cryptocurrencies proper in the first quarter of next year”.
He said that once the cryptos “flip next year”, this is “when prices start moving again”. But of course, there are those that seem to oppose Novogratz’s view. If you are going to ask Tim Swanson who is the founder of fintech advisory company Post Oak Labs, he said that Novogratz is “trying to predict something that he has no influence over”. Swanson added that “This is what happens anytime he talks about price”.
Swanson mentioned that Galaxy Digital is looking to imitate Goldman Sachs and this trend has been on the horizon for the last four years.
Bitcoin is currently below $4,000. Bitcoin recently slumped down below $3,500 mainly because of a number of reasons. One, you have the Bitcoin cash hard fork. In addition to this, the US Securities and Exchange Commission has also implemented stricter rules in the industry as it penalized two companies for selling unregistered securities.
And with the recent price drop, Bitcoin miners are losing profits as well. These are just some of the problems that the crypto market is facing.