Mike Novogratz and Raoul Pal Unveil Predictions on Bitcoin and Potential Sell-Off

By Aaron Feuerstein December 11, 2023 In Bitcoin, ETF
  • Crypto’s potential is seen as comparable to a high-growth emerging economy and the introduction of ETFs could significantly facilitate capital inflow.
  • Mike Novogratz views Bitcoin as unlikely to become a currency for daily transactions due to its fixed supply and volatility, echoing Federal Reserve officials.
  • While acknowledging technologies like the Lightning Network, he sees Bitcoin and altcoins like Ethereum and Solana primarily as stores of value.
  • Novogratz predicts cyclical price patterns in the crypto market with rises before major events like ETF launches, followed by sell-offs as buying opportunities.

Former Goldman Sachs Manager Raoul Pal and CEO of Galaxy Investment Partners Mike Novogratz recently talked about ETFs, Bitcoin and what’s in store for 2024, here are the highlights.

Crypto’s Potential and the Role of ETFs

Mike Novogratz discussed his increased confidence in the potential for a Bitcoin ETF following Larry Fink’s positive remarks about Bitcoin. He said the endorsement by the world’s largest asset manager has significantly legitimised the crypto space. He remains bullish for the next 12 months, comparing the crypto space to an emerging economy with high growth potential.

And we’ve got crypto land, an emerging economy with massive population growth, productivity growth, all of that stuff. So, it just looks like an emerging market in a little macro world.

Mike Novogratz

Raoul Pal likened the introduction of ETFs to a trade deal, facilitating capital flows into crypto. Suggesting that opening the market to these flows could attract significant capital to the crypto space, acknowledging the potential for this cycle to be different from previous ones.

Not Buying Pepsi Cola with Bitcoin: Novogratz

Novogratz recalled a meeting with Federal Reserve officials, who believed Bitcoin could not serve effectively as a currency due to its fixed supply and susceptibility to volatility. Novogratz agrees, and although he acknowledged that technologies like the Lightning Network exist to facilitate Bitcoin transactions, he believes Bitcoin is unlikely to be widely used as a transaction currency. 

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“And that was their belief and I think they’re right. I don’t think Bitcoin will ever be a currency that we buy Pepsi Cola with. And you know, listen, it started off, people bought illicit sh*t with it, but no one’s buying stuff with Bitcoin.”

Mike Novogratz

Regarding altcoins like Ethereum, Solana, Doge, and others, he notes that their value largely comes from being a store of value, similar to Bitcoin. This value is driven by community investment; as more people invest and participate in these systems, their value increases. He emphasised the role of the community in determining the value of these cryptos, indicating a shift in his earlier belief that only Bitcoin could be a store of value while other crypto needed practical utility.

A Sell-Off Post ETF Listing?

For the crypto market’s future, Novogratz predicts a pattern where prices rise leading up to significant events (like ETF launches), followed by a sell-off, which he believes would be a good buying opportunity. He expects a large inflow of investment into Bitcoin from major financial institutions and sees this as a sign of growing acceptance and promotion of Bitcoin. He also commented on the impact of the Federal Reserve’s potential policy actions on the crypto market and reflected on the market’s past volatility, suggesting that previous downturns were exacerbated by poor decisions within the crypto industry. He believes that if not for these issues and regulatory hurdles, larger financial institutions would be more actively involved in the crypto space.

“You know, the other thing that’s interesting is if it wasn’t for Gensler, we would have Goldman and Citibank and Millennium and you know, Bridgewater. We’d have big players from trad-fi very much engaged in the space.”

Mike Novogratz

Aaron Feuerstein
Author

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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