Michael Novogratz has long been known for his bullish statements on Bitcoin and the cryptocurrency market. He believes a large influx of fresh capital from institutional investors will flow into crypto, as they will not want to miss this opportunity.
Novogratz, a former Goldman Sachs partner and ex-hedge fund billionaire, revealed last April that he had allocated 10% of his net worth to cryptocurrencies. With the rapid price increases since then, his crypto holdings are now valued between $700 million and $1 billion.
Novogratz compares the cryptocurrency and blockchain boom to the rise and social revolution driven by the internet in the 1990s.
In an interview with thestreet.com, Novogratz explained that institutional investors are entering the crypto market step by step and many have already begun investing, but the major breakthrough is still ahead (paraphrased):
Their first form of participation will be through venture capital funds. Many of them are already involved because they invest in funds like Sequoia, Polychain, Benchmark and other VCs that focus on this space. The next step for them will be buying coins and/or participating in ICOs directly, though many are already participating in ICOs indirectly through their venture investments.
According to Novogratz, major venture capital firms are enthusiastically buying in, including technology conglomerates like SoftBank, Tokyo-based SBI Holdings, and many others.
He also says the next phase will see large investors putting money into security tokens, where they buy a percentage of revenue or ownership in a company rather than the whole asset.
Earlier this month Novogratz grabbed attention by predicting a $20 trillion market capitalization for the crypto sector. He argued that FOMO—fear of missing out—among institutional investors could trigger a wave of inflows (paraphrased):
The same FOMO you’ve seen in retail will be driven by institutional investors.
Several major firms and initiatives underscore this trend, including Goldman Sachs, eToro, Coinbase, and a collaboration between Ledger, Nomura and Global Advisors to establish an exchange exclusively for institutional investors. These moves align with the adoption path Novogratz described.
A study published by Grayscale also highlights growing institutional interest in Bitcoin and other cryptocurrencies. Of course, rising interest is not a guarantee of immediate price surges or continuous gains.
There are also reports that asset manager BlackRock is exploring the possibility of entering the crypto market. Although CEO Larry Fink has downplayed client demand for cryptocurrencies, he has expressed enthusiasm about blockchain technology.
The price of Bitcoin recently rose by 3.58 percent to €6,544.98 (9:30 CET). The seven-day chart is also in the green, showing an increase of more than 19 percent.
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