Wall Street Bitcoin bull believes it will become “digital gold”

Mike Novogratz, CEO of Galaxy Digital has stated that he is in crypto for the long term even though his firm has lost over $136 million in the first three quarters of this year.

The hedge fund manager who previously lost a fortune for Fortress Investment Group, and subsequently generated another fortune as one of the early investors in Bitcoin and Ethereum, made his first big moves in the space in 2013, pouring more than $7 million into Bitcoin and cryptocurrency investments.

In an interview with Bloomberg, Novogratz says,

“I went into it thinking in the long run crypto is going to be a real structural shift in the world and I can just hedge my portfolio. And to be fair, we did a really great job not losing money the first 60 percent down. What you forget is that a market like Bitcoin that’s down 84 percent has dropped 60 percent—and then another 60 percent. That’s where the pain happens. You start buying Ether again, because it’s only $400 after being at $1,300. But then it drops to $100, and you’ve lost 75 percent of your money. We haven’t done horribly in that context, but we’re still down.”

He notes the recent Bitcoin Cash fork and the SEC’s crackdown on ICOs as major factors that have fueled further declines.

“While I believe in the underlying technology and believe in the crypto movement, when prices get stupid, I sell. A lot of my friends in crypto just couldn’t let go. They were saying, ‘This is going to change the world.’ Revolutions don’t happen overnight.”

Novogratz says the ICO market is “pretty much dead right now,” having seen only $65 million in investment this month down from a figure of billions at the start of this year. However, he predicts that security tokens will grow and spark more innovation.

As for Bitcoin, he believes the future is bright.

“I do believe Bitcoin is going to be digital gold. That means it’s the only one of the coins out there that gets to be a legal pyramid scheme. Just like gold is. All the gold ever mined in the history of the world fits in an Olympic-size swimming pool. You’re out of your mind to think that pool’s worth $8 trillion. But it is because we say it is. The fact that David Swensen (Yale’s chief investment officer) put an investment into Bitcoin, with his reputation on the line, his endowment on the line, tells you something. Some of the smartest people in the investing world think it’s a store of value.”

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