On 23rd July, CryptoTrader’s Ran Neu Ner interviewed the Founder and CEO of Galaxy Digital LP, Mike Novogratz, at the Korea Blockchain Week. The discussion contained his opinion on Bitcoin bottom, institutional investors entering the cryptocurrency market, custody options and more.
According to the discussion, Novogratz was a non-believer of investing in the cryptocurrency market till the December of last year. However, a transformation in his opinion was observed this time. When asked about his updated views on the market, Novogratz indicated towards having half a mind that Bitcoin has bottomed for the year. He added:
“We’re really building a nice bottom for the next move up. I think the next move up is going to need custody from a trusted source. It’s going to need a little more regulatory clarity. You know we won’t take out 10,000 without those two things because that’s what brings the institutional investors in but we’re gonna get there.”
Here, NeuNer raises a question of ‘what makes him think that Bitcoin has bottomed’. The billionaire put forth his experience-backed opinion and stated that he sees a slow but sure adoption of the cryptocurrency. He also said:
“You know we’ve tested the downside a bunch and kind of bouncing off it, but I see slowly but surely more adoption. There are more people at these conferences, there are more people working in this space.”
Moreover, the veteran capitalist also painted a scenario of the private investments where institutions are vying among themselves over market opportunities. Therefore, a ‘weird’ situation has arisen where the private sector is actually richer than the public sector where the coins are trading. According to him, a lot of private institutions are charging attack in the market by investing in venture capital funds as it is a safer option.
Next, the discussion went on to how the cryptocurrency market can attract institutional investors. On this, Novogratz explained that multiple blockchains are slowly being built and becoming more industrial. The ‘architecture’ required for the institutional investors to walk in revolves around custody. Moreover, these custody options should be connected with the trusted names in the market. He further said:
“Blockchains themselves are being built and they’re getting more industrial. They’re not there yet. But mostly it’s the architecture around what institutional investors need. They need custody with the name that they can trust…. The idea of custody is to separate and so it’s gonna be… maybe it’s a Fidelity …Goldman Sachs. It’s gonna be some name that you’ve heard before.”
The economist also clarified that the cryptocurrency platforms will continue to grow but the ‘real’ institutional platforms are risk-averse, and thus, will serve institutional investors in a safer way.
Lastly, Novogratz shared his views on the existence of ‘institutional FOMO’ in the market. In his opinion, the institutional FOMO is not visible yet but is cent percent relevant to the cryptocurrency market. There will be a tipping point where all the cutting edge pension funds and suchlike will come rushing in, acknowledging the institutional FOMO.
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