23 January 2019
Billionaire hedge fund legend Mike Novogratz sees bitcoin hitting US$10,000 by March. Photo: Reuters
Billionaire hedge fund legend Mike Novogratz sees bitcoin hitting US$10,000 by March. Photo: Reuters

Big investors will soon adopt bitcoin, says hedge fund legend

Billionaire hedge fund legend and former Fortress executive Mike Novogratz said mainstream institutional investors are about six to eight months from adopting bitcoin, Reuters reports.

“The institutionalization of this space is coming. It’s coming pretty quick,” he said.

Novogratz said he expects major financial firms will soon start to offer bitcoin or similar products as an investment option, one that could be easily purchased over the phone. He also said that “a turning-point product from a big financial firm” could arrive within six months, although he declined to name a specific company.

“When it’s that easy, the price of bitcoin or ethereum is going to go much higher, and that is a lot closer than people think,” Novogratz told the Reuters Global 2018 Investment Outlook Summit in New York.

Novogratz is now chief executive of his own crypto-hedge fund Galaxy Investment Partners, a firm that bets on cryptocurrencies and related businesses.

He said Galaxy’s largest investment is in bitcoin, owning a “very big” holding of ethereum and about 30 to 35 different tokens and companies. He declined to give the percentages of each holding, citing competitive reasons.

After hitting a record peak last week near US$8,000, bitcoin lost almost a third of its value in less than four days, before recovering more than US$1,000.

At noon Wednesday Hong Kong time, bitcoin was $6,798.

Novogratz said he bought US$15 million to US$20 million worth of bitcoins during the latest pullback over the weekend.

While traditional investors still view bitcoin as opaque and highly speculative with potential to collapse, Novogratz said his biggest regret this year has been not buying more cryptocurrencies, such as ethereum, when prices fell, because he knew that “they would keep going up”.

Now he sees bitcoin, for instance, hitting US$10,000 by March.

According to Reuters, one of Galaxy’s investments is in the token sale of Worldwide Asset Exchange, an online marketplace for so-called skins, which are virtual accessories of video game characters. Novogratz is also an investor in FunFair, a decentralized gaming platform.

After Fortress, Novogratz has quickly become one of the most prominent advocates of the blockchain. He recently created his own crypto-hedge fund, putting in about US$100 million of his own money. He hopes to raise about US$500 million, making it the largest fund of its kind.

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