Michael Novogratz, a former partner at Goldman Sachs and popularly called the “pretty face of crypto[currency]”, said that he is now the ugly face of the bust. Speaking to Bloomberg, he pointed at SEC sanctions on certain ICOs and the uncertainty surrounding Bitcoin Cash’s hardfork as the reasons behind Bitcoin’s drastic fall from $6,200 to $3,400.
He also said that the ICO market is “pretty much dead” currently, and compared his company, Galaxy Digital Holdings Ltd., to a paddling surfer who’s waiting for the next wave.
Novogratz still believes that Bitcoin is the promised “digital gold”, saying that “some of the smartest people in the investing world think it’s a store of value”. He further claimed that it is one of the only coins allowed to be a legal pyramid scheme, which seems to really stretch and twist the definition of a pyramid scheme.
However, he is confident that his company, Galaxy Holdings, will break even in the near future. Market speculation has suggested that Bitcoin price has bottomed, and that there is nowhere to go but up, and in that sentiment, he said they are “not nervous, we’re frustrated that our investors have lost money”.
On the topic of cryptocurrency use cases, Mike anticipates virtual reality. On their investment in High Fidelity, he said:
“People think I’m crazy when I say that, but Second Life does $500 million a year of GDP, real money traded back and forth in a virtual world with old technology. That’ll be the first use case where blockchain really works.”
On the subject of ICOs and SEC, he said that the hype and fraud coupled to see a lot of people lose a lot of money. However, the SEC intervened and slammed the brakes. After having spoken to them at length, he is assured that the SEC will not “kill this innovation” and predicts a market for security tokens- like real estate portfolio that’s tokenized- whose yield will be 14 percent, not unpredictably meteoric nor damningly cratering like Bitcoin can be.
He addressed the fears surrounding Bitcoin prices. According to him, the price rise was a drug, an instance of testosterone boiling over and its fall led to pessimism and rampant fear. He stated:
“That was a drug, and I don’t say that lightly…there’s the pessimism, and the fear, and the “Oh my God, it’s going to zero.” But it’s not going to zero. We’re at the methadone clinic.”
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