Novogratz: Bitcoin Will Reach $40,000
CryptoBit News Today2 min read
Michael Novogratz, former manager of the Fortress hedge fund, predicted Monday that Bitcoin could reach $40,000 by the end of 2018. Novogratz said that bitcoin has the potential to multiply more than four times over roughly the next 13 months.
In an interview, Novogratz said that Bitcoin was “easily” poised to reach $40,000 as it hovered just $300 shy of $10,000 on Monday. He also suggested that Ethereum, which reached a record $493.40 on Monday according to CoinMarketCap, could triple from its level.
Novogratz attributed the potential gains to an influx of new money into the cryptocurrency market, particularly from Asian investors. Japanese yen transactions led bitcoin volume at around 62 percent according to CryptoCompare, while U.S. dollar trades accounted for about 21 percent and South Korean won trades represented roughly 9 percent.
Unlike commodities such as oil, Novogratz pointed out that companies cannot produce more bitcoin to meet increased demand, as the digital currency’s supply is limited to 21 million coins.
Novogratz’s personal investment and advice
Despite his bold predictions, Novogratz has warned against retail investors putting more than 1 to 3 percent of their net worth into cryptocurrencies.
Novogratz plans to start a $500 million digital assets fund through his new firm, Galaxy Investment Partners, having pledged $150 million of his own funds while seeking additional capital.
When bitcoin dropped by over 20 percent in mid-November, Novogratz said he purchased $15 million to $20 million worth of the digital currency.
As the cryptocurrency market has continued to soar, with a total market capitalization of $304 billion on CoinMarketCap on Monday, investor sentiment and outlooks have varied.
In the past week, two prominent analysts — Fundstrat’s Tom Lee and Standpoint Research’s Ronnie Moas — raised their 2018 price targets for Bitcoin to $11,500 and $14,000 respectively. But JPMorgan’s CEO Jamie Dimon has remained a vocal naysayer, calling Bitcoin a ‘fraud’.
Novogratz himself acknowledged the market’s volatility, saying that he expects there to be “50 percent corrections” along the way. He noted that many institutional investors holding substantial capital were preparing to join the bitcoin market.
