Mike Novogratz, CEO of Galaxy Digital. Photo: Jutharat Pinyodoonyachet/Bloomberg
Bitcoin’s bounce to record highs in recent days is only the beginning of a fresh surge higher for cryptocurrency, says US billionaire Mike Novogratz.
The CEO of Galaxy Digital, which runs a range of crypto-focused businesses and investments, says Donald Trump’s election as president was “the most important thing” to happen to digital assets in years.
Novogratz will present at this week’s Sohn Hearts & Minds conference in Adelaide, and despite publicly supporting Kamala Harris’s campaign, he has already been a beneficiary of Trump’s victory, with his net worth jumping nearly $1bn in just one day last week. Bloomberg estimated his personal fortune rose to $US4.6bn ($6.9bn).
The former Goldman Sachs and Fortress Investment Group partner says bitcoin should rise from current levels near $US75,000 to $US100,000 by the end of the year as the US prepares for a pro-crypto president and regulators.
Novogratz says many of Trump’s inner circle are crypto supporters, including vice president-elect JD Vance.
“I think it’s the most important thing that’s happened to my business, Galaxy, and the cryptocurrency industry in four years,” he says.
“In the US, we have been in purgatory – that place between heaven and hell where you just get stuck.”
Mike Novogratz expects Bitcoin to climb. Picture:Jutharat Pinyodoonyachet/Bloomberg
US regulators have made life very difficult for crypto companies, Novogratz says.
“Trump’s going to change all that,” he says.
“He ran on a pro-crypto platform, the crypto people were big donors in his campaign, he made pledges and promises, and he’s surrounding himself with crypto people. Tons of his team really like our industry.”
Likely changes to regulations would allow big institutions such as Goldman Sachs and Citibank to own crypto on their balance sheets, and that would draw in much more institutional money, Novogratz says.
“Galaxy was set up to bring in institutional money and we’ve done a pretty damn good job, but we’re 20 yards down the field, maybe 15 yards down the field, only for the real risk-lovers,” he says.
“For the big, big money, it’s all still waiting, so I think that’s the biggest change.
“You have seen bitcoin prices rally 15 per cent, ethereum prices 15-20 per cent. I think it’s going to keep going – we’re through all-time highs. Our stock has had two massive days because people realise that finally the government’s going to put a tailwind behind these people instead of a headwind.”
At the Sohn Hearts & Minds conference, Novogratz will be speaking virtually with Coinbase’s country director John O’Loghlen about the future of digital assets and its opportunities.
Novogratz says it will be “more of a fireside chat as opposed to a classic Sohn presentation where I’m pitching one idea”.
“But the idea I would pitch, that will come through in all my answers, is that this is like the new chapter that’s just starting.
“We’re not at the end of the game – we’re at the beginning of the game.”
As for his tips about the next big things in crypto, he is keeping quiet for now.
“I’m going to save two of those for the conference and will give them to you there,” he says.
“I don’t want to shoot all my bullets.”
Novogratz’s bitcoin prediction – “I think we get to $US100,000 by year-end” – is not as bullish as some crypto-believers who are talking bitcoin values of millions of dollars within five years.
“Bubbles can go crazy,” he says. “Bitcoin can go much, much higher, like $US500,000, a million, if the dollar shits its pants. If our government can’t finally rein in spending and stop these crazy deficits, and people lose faith in the greenback, then it’s hard to put a top on it. It’s not that bitcoin gets stronger, it’s the dollar gets weaker.”
Novogratz says he prays that bitcoin will not climb to $US1m, even though that would supercharge his wealth.
“If bitcoin gets to $US1m it’s because we’ve lost civil society,” he says. “When you lose your currency, which we saw in Venezuela, we saw in Zimbabwe, when you lose your currency you lose civil society, and so it gets really ugly.
“We should all pray for good governance. We’ve just got a new president, we will have a new Treasury secretary, at one point a new Fed governor. Those are the three most important positions in the country right now, and so you hope they make the right decisions and not shitty ones.”
Novogratz’s pre-crypto history involved making and losing billions of dollars through investment banking and hedge funds, and a big-spending billionaire lifestyle.
An article in The New Yorker in 2018 reported that he paid for a Duran Duran concert at a Princeton University reunion, and he claimed cryptocurrencies were the direct result of the 2008 Global Financial Crisis as people lost faith in bankers.
It said he called himself “the Forrest Gump of bitcoin” for being in the right place at the right time as cryptocurrency emerged.
Today, Novogratz sees cryptocurrency and blockchain as vital in the growth of artificial intelligence. “In the future money is going to move between computers, and you’re going to need digital money to move between computers, and that’s what crypto is,” he says.
He did not see crypto’s next leg higher as a repeat of the two speculative booms in the past seven years. “I would say I have an out-of-consensus opinion,” he says. “Both in 2017 and 2021 when we had the two manias, in some ways crypto was the new and hot game in town, and lots of young kids around the world were stuck at home because of Covid.
“They had excess cash because the government gave them cash and they couldn’t spend it on beers and girls. So this kind of frenzy of speculation on the newest coin showed up with a story that was pretty powerful.”
Future growth, Novogratz says, will be in established crypto communities such as bitcoin, ethereum, solana and others.
“It doesn’t mean that new projects won’t get funding, but some of the old projects that have become zombie chains or dogs are not going to draw in as much excitement.”
This year’s Sohn Hearts & Minds conference, at Adelaide’s Festival Theatre on November 15, will explore space, AI, geopolitics, biosciences and investing, and includes stock picks from global investment experts. All profits go to medical research.
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