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Billionaire Mike Novogratz Issues Reality Check for Crypto Investors 

Billionaire Mike Novogratz has come down to earth about the crypto market. Novogratz, who is at the helm of crypto merchant bank Galaxy Digital, is usually the biggest bitcoin bull in the room, but the bear market of 2018 coupled with bitcoin’s recent narrow trading range has seemingly taken its toll.  Novogratz participated in the Reuters investment summit in New York where he stated: 

“I think ambitions have been tempered a little bit by reality,”

It’s not that the former Fortress hedge fund manager has given up on crypto or the blockchain startups his firm backs, not by a long shot. But he admits to having gotten ahead of himself, even “too greedy,” with the trading strategies he pursued on behalf of investors, saying: 

I think the timing is going to take longer than people had hoped. But it’s going to happen.”

China Catalyst 

Meanwhile, the number of catalysts in the crypto market is only growing. The crypto market was recently buoyed by the surprise embracing of the blockchain by China President Xi Jinping. According to Novogratz, 

“He just credentialized crypto and blockchain.” 

The Chinese president’s 180-turn was enough to lift sentiment in the broader crypto market, sending both the bitcoin price and that of China-based coins such as NEO, higher. It also gives the country a head start in the blockchain race while U.S. regulators continue to lag and shun tech innovation. 

Meanwhile, in Hong Kong, which is Novogratz’s former stomping ground, the Securities and Futures Commission has created a regulatory framework in which crypto exchanges can operate. The SFC’s rules, which include KYC and AML standards, only apply to exchanges that support at least one security token on their trading platform. 


Facebook Effect 

Novogratz remains optimistic about Facebook’s Libra project despite the regulatory pushback the planned stablecoin has received. He has been positive about Libra since the getgo, suggesting that it validates the crypto space. Yet the social media giant’s plans can’t seem to get off the ground, with the EU most doing everything in its power to thwart the Libra launch, saying most recently that it presents “unmanageable or excessive risks.” 

Novogratz does believe that Mark Zuckerberg made a mistake by introducing Libra to the world as a cryptocurrency, as the idea of the social media giant managing people’s money spooked regulators. Instead, Zuck should have billed it as a “global payment tool,” Reuters reports. 

Novogratz on Bitcoin Price 

Novogratz’s shift in expectations for bitcoin began to emerge earlier this year when he predicted a narrow trading range for the leading cryptocurrency while other market leaders clung to their stratospheric projections. He said as early as the spring that the bitcoin price would be stuck between $7,000 and $10,000 for a while, and for the most part, he has been right. He also said that he wished he had sold some BTC at its 2019 peak of nearly $14,000, with the caveat that he would have then taken the opportunity to reenter at a lower price. He is a former hedge fund trader, after all.

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