Cryptocurrencies at this point is a tricky industry. It has been constantly struggling throughout 2018. Most of its bearish movement this year was a combination of different problems ranging from the lack of regulatory clarity in the market to the slow entry of institutional investors. However, for Mike Novogratz who is a former Goldman Sachs partner and hedge fund manager, he remains undeterred by Bitcoin’s drop.
Novogratz had his days when Jamie Dimon called Bitcoin a “fraud” and he predicted that its price is going to hit $10,000 and just keep going up. And this prediction really happened. Bitcoin was able to hit near $20K in mid-December last year.
Now that Bitcoin is floating below $3,500, Novogratz has become an unlikely hero for the crypto movement. Novogratz is the epitome of someone who really believes in cryptocurrencies. While raising funds for Galaxy Digital Holdings, Bitcoin began to plunge. And since then, he lost $136 million worth in trading.
Poster Boy for the Crypto Bubble?
When Bitcoin was stable at around $6,200 to $6,500 a few months ago, Novogratz mentioned that he thought that we’ve seen the bottom of Bitcoin. However, things went south after the Bitcoin Cash hard fork. From there, miners started turning off their mining equipment, decreasing the total hash rate in the network. And at this point, Bitcoin hasn’t been able to recover fully.
In a recent interview with Bloomberg, he mentioned that “For a while, I had a series of tremendously good calls. I was the pretty face of crypto. Now I’m the ugly face”. He also added during the interview that he was able to anticipate the first 60 percent drop in the price of Bitcoin. He said that “And to be fair, we did a really great job not losing money the first 60 percent down. What you forget is that a market like Bitcoin that’s down 84 percent has dropped 60 percent—and another 60 percent. That’s where the pain happens”.
Why He Thought $6,200 Was Bottom
There was a point when Bitcoin was more stable than stocks such as Netflix and Amazon when it was trading at around $6,200 to $6,500. There were crypto observers who thought that the Bitcoin market has finally matured.
He said that “I did think Bitcoin was going to hold at $6,200. It stayed there for four months”. He also discussed the SEC’s action regarding ICOs that even caused the price of cryptos to plunge deeper. He said that “At the same time the SEC came out and sanctioned a few ICOs and said, ‘Oh by the way, your investors can sue for damages’”. And he thinks that it “scared the heck out of a lot of people”.
He also said that the “ICO market is pretty much dead right now”. This was after the SEC decided to sue celebrities and even companies selling unregistered securities.
Macro Markets on Steroids
From trading betting on currencies, interests and economic policies, Novogratz explained his interest in cryptos. He said that “For me, crypto was interesting because what macro guys do is try to make complicated things simple”. He added that “It was macro markets on steroids” when talking about the crypto market. He thought that he had never seen “something go parabolic on a log chart before”. As for its future, Novogratz even thinks that he is still going to make money in the industry. In fact, he even thinks that his investment with High Fidelity will break even next year, if not make more.