According to Mike Novogratz the founder and chief executive of Galaxy, cryptocurrencies are likely to “washout” in the short term. Following Coinbase’s direct listing, the billionaire investor expected a wild week ahead.
According to Novogratz, Coinbase’s Nasdaq listing created a lot of frenzies, a state of maximum financial risk in which investors, especially retailers, believe the good times will continue unaffected. It’s normally during this point that the market experiences a brief correction.
Coinbase, a cryptocurrency exchange, went public on Wednesday, closing with a valuation of $65.4 billion, in what analysts have called the crypto world’s “coming of age.”
The direct listing of Coinbase on the Nasdaq sparked a lot of interest in cryptocurrencies. It pushed bitcoin to new highs near $65,000 and moved the ether, XRP, and Dogecoin cryptocurrencies to new highs as well.
But in Novogratz’s opinion he said that,
“I’ve seen a lot of weird coins like Dogecoin and even XRP have huge retail spikes, which means there’s a lot of frenzies right now.” He added: “That never ends well, and so we’ll probably have a washout at one point.”
He also predicted that, Because of all the excitement around Coinbase, we might see some uncertainty in the next week, the former Goldman Sachs GS partner said on Wednesday during the second week of an Investing in Crypto virtual event series organised by MarketWatch and Barron’s.
$100,000 for bitcoin by the end of the year?
On CNBC’s “Squawk Box,” Novogratz said that total crypto capital is currently about $2 trillion, or around half of one percent of all wealth. He said that If you don’t believe it will be 2% to 3% in the next two to three years, you’re not paying attention to the patterns.
He went on to say that the amount of growth that we’re going to see in our space is staggering. We’re just getting started,” said Novogratz.
We’re just getting started, and what’s important is institutions now realize this is an asset class. It wasn’t an asset class eight months ago. I was hoping it would be. I was praying it would be. I was trying to convince people it would be. But now it’s an asset class. And every single participant we talked to is getting involved.”
Mike Novogratz is ultra bullish for bitcoin and predicts that bitcoin will be worth $100,000 by the end of 2021, and will have increased five-fold by 2024.He calls Coinbase’s IPO “monumental” for the industry.
As for bitcoin, its price plunged following the Turkish ban, which was opposed by the key opposition party, Bitcoin BTC is currently trading at $62,297.69.