Why Novogratz is staying in crypto: BTC is a "legal pyramid scheme"

11 Dec, 2018 | Updated: 11 Dec, 2018
by David Robb
Opinion
Why Novogratz is staying in crypto: BTC is a legal pyramid scheme

Michael Novogratz recently gave an interview to Bloomberg, explaining his choice to stay in crypto despite losses. The legendary trader said that he believes "Bitcoin is going to be digital gold".

Novogratz is the head of Galaxy Digital, an investment firm he founded to capitalize on the growth of Bitcoin. He was one of the most prominent institutional figures with faith in crypto, predicting that it would rise above $10k as early as September 2017.Since then, the ex-Goldman Sachs investor and hedge fund manager has made some significant losses due to the ongoing bear market

He was confident that the price of BTC would hold at $6200 before rising again, and blames the most recent crash on the Bitcoin Cash fork. Recent decisions made by the SEC also played a part, according to Novogratz, who claims that the prospect of ICO investors being able to sue "scared the heck out of a lot of people".

Despite the losses, Novogratz is staying in crypto for the long run. He sees tokenized real estate as being a potential source of growth, and also sticks by the belief that Bitcoin is digital gold, a strong store of value. He says the fact that "David Swensen [Yale University’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."

Read more: Novogratz believes 2019 a good year for crypto, despite losing $136M in 2018Novogratz defies "crappy bear market", pivots Galaxy to tokenized real estate

He also mentions an investment in High Fidelity, a project that offers users a virtual world: "People think I’m crazy when I say that, but Second Life does $500 million a year of GDP, real money traded back and forth in a virtual world with old technology. That’ll be the first use case where blockchain really works." Coinbase CEO Brian Armstrong has also recently expressed his faith in virtual reality as the future of crypto adoption.

Read more: Coinbase's Brian Armstrong believes that crypto will be "widely used" in VR

VIDEO: Bitcoin from $2.5K to $333K?! Coinbase going crazy over altcoins!

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