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Mike Novogratz: Bitcoin Could 'Easily' Reach $40,000 by End of 2018


By    |   Tuesday, 28 November 2017 01:43 PM

Hedge fund manager Mike Novogratz says the price of digital currency bitcoin could “easily” reach $40,000 in the next year.

One of the biggest bitcoin bulls on Wall Street says cryptocurrencies are in a massive bubble. He’s still starting a $500 million fund to invest in them.

"There's a big wave of money coming, not just here but all around the world," Novogratz, formerly a macro hedge fund manager at Fortress Investment Group, recently told CNBC.

"Bitcoin could be at $40,000 at the end of 2018. It easily could," he said.

"Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well," adds Novogratz, formerly a macro hedge fund manager at Fortress Investment Group.

The total market capitalization of all digital coins on CoinMarketCap hit $304 billion Monday, CNBC.com explained. Novogratz said he expects that could increase by about six times to $2 trillion at the end of next year.

But Novogratz doesn't recommend retail investors put any more than 1 to 3 percent of their net worth in cryptocurrencies, or wealthier investors to put more than 5 to 10 percent, CNBC explained.

"What's different about these coins than other commodities ... there is no supply response here," Novogratz said.

"So it's a speculator's dream in that as buying happens there's no new supply response that comes up. So every price move gets exaggerated. It's going to get exaggerated on the way up. There will be 50 percent corrections. It will get exaggerated on the way down," he said.

Novogratz, who’s says he began investing in bitcoin when it was at $90, is starting the crypto fund because of the potential for the technology to eventually transform financial markets, Bloomberg reported.

Bitcoin topped a record $9,900 earlier Tuesday in Bloomberg composite pricing.

“This is a bubble and there is a lot of froth. This is going to be the biggest bubble of our lifetimes,” Novogratz said at a cryptocurrency conference Tuesday in New York.

“Bubbles start around ideas that are often right,” he said. “I don’t think many of these are currencies, even bitcoin,” he said at the Coindesk-sponsored conference. “Bitcoin will win battle for store of value.”

Novogratz’s Galaxy Digital Assets Fund would be the biggest of its kind and signal a growing acceptance of cryptocurrencies as legitimate investments.

For Novogratz, the fund marks a comeback to professional money management after humbling losses at Fortress Investment Group LLC and almost two years of self-imposed exile from Wall Street.

“Not everything can win, now it feels like it can because so much money is pouring in,” Novogratz said. “Litecoin doesn’t add enough new stuff to replace bitcoin. it won’t survive as decentralized way to store wealth.”

Thomas Lee, who heads research at Fundstrat Global Advisors LLC, said the peak in bitcoin is going to come from the trade and speculation side. Maybe that happens when pension funds start allocating to crypto, he said at the conference.

Lee doubled his bitcoin price target last week to $11,500 by the middle of 2018, which was a 40 percent increase from levels at the time. He called bitcoin the next big wave of innovation during the conference.

The digital currency has seen an eye-watering tenfold increase in its value since the start of the year and has more than doubled in value since the beginning of October, lifted by the prospect of crossing over into the financial mainstream, amid a flurry of crypto-hedge fund launches, Reuters reported.

Data compiled by Alistair Milne, the Monaco-based manager of the Altana Digital Currency Fund, showed U.S. bitcoin wallet provider Coinbase added 300,000 users between Wednesday and Sunday, during the U.S. Thanksgiving holiday. The total number of Coinbase users globally now stands at 13.3 million.

(Newsmax wire services contributed to this report)

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Hedge fund manager Mike Novogratz, who is starting a $500 million fund to invest in cryptocurrencies, said bitcoin is likely to win out over rival digital currencies in the long run.
novogratz, bitcoin, digital, currencies
Tuesday, 28 November 2017 01:43 PM
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