Cryptocurrencies have been under pressure amid constant scrutiny from regulators. Last month, the SEC rejected nine proposals for bitcoin ETFs and suspended trading in two bitcoin-related products, citing misleading materials that characterized them as ETFs. In 2018, bitcoin has dropped about 50 percent, while Ethereum is down almost 75 percent.
But on Thursday September 20, 2018, Michael Novogratz, a former hedge fund manager at Fortress Investment Group and Goldman Sachs Group partner, said that the bottom in cryptocurrency prices has been reached and bitcoin is due to bounce back.
He mentioned Bitcoin experienced a “classic speculative global mania” in 2016-2017 but is now on the upswing because the market has hit “seller fatigue,” Novogratz said at Yahoo Finance’s second annual All Markets Summit on Thursday.
According to Novogratz, prices came down for several reasons:
- Prices got ahead of the growth in the ecosystem
- Panic selling to pay for salaries, insurance, computers, travel, and research
- Overall boom and bust of ICOs
“Bitcoin has held $6,000. Yes, it is off its highs, but it has established itself as a store of value,” said Novogratz, “I think institutions are moving towards investing. It’s shocking how much has happened.”
“The banks are going to experience institutional FOMO just like retail experienced it. We’re seeing it as we sit here. And they’re doing a ton of work because this is real. This is not tulips. We will have an internet 3.0. There will be a decentralized set of global supercomputers.”
Novogratz was actually one of the first to call a bottom, making his case with the Bloomberg Galaxy Crypto Index in a tweet last week:
Novogratz expects that prices will turn around when the herd of institutions arrives, but not in a straight up fashion. “We’re in this environment now where I see lots of institutional money getting ready to spend,” but “this is going to be a grind back.” He predicted that this will start to happen in the “next two to three months.”
“B2B reporter – Content Manager – Contributor – Fintech – Blockchain – Cryptocurrency”
Simon Chou is a B2B reporter and content manager specializing in technology and finance. He has worked with many clients in the fintech and blockchain space. He holds investment positions in bitcoin and other large-cap cryptocurrencies, and has been reporting on cryptocurrency since 2017. Currently, Simon is the content manager for a major cryptocurrency exchange @HybridBlockHQ.