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With his company, Galaxy Digital, in the process of acquiring BitGo, Novogratz also commented on El Salvador’s Bitcoin moves.
On Tuesday, September 7, the world witnessed yet another Bitcoin price crash as the price of Bitcoin nosedived to $43,000. This resulted in the liquidation of above $3.54 billion in derivative markets. However, the coin market has bounced back up. At the time of writing, the price of Bitcoin (BTC) was back up to $48, 649. There are suggestions that the BTC price crash on Tuesday is related to its official adoption as legal tender in El Salvador. According to a crypto veteran, Mike Novogratz, CEO of Galaxy Digital, the Bitcoin (BTC) price fluctuation was not strange. Rather, he says it was expected.
Reason for Bitcoin Price Crash Explained
In an interview with Bloomberg, Novogratz noted that the cryptocurrency market is controlled by retail investors and their actions affect the market direction. According to the billionaire, these retail investors are excited by the recent spike in positive news about country adoption and also the increased institutional interest.
In his words, people have started to realize that “Bitcoin is the internet of value transfer” and is not just a hedge against bad monetary fiscal policy.
Indeed, there has been crypto-friendly news recently. First, Visa bought non-fungible tokens (NFTs) and described them as promising exchange mediums. Additionally, Walmart and Amazon have been looking to and recruiting crypto experts into various roles.
Novogratz believes that it is just beginning to dawn on retail investors that this is web version 3 and no one wants to miss on what could very well be the next internet. This attempt to leverage on the available is what he believes led to the price drop on Tuesday – a phenomenon he has described as being “a little air popped out of the balloon.”
With his company, Galaxy Digital, in the process of acquiring BitGo, Novogratz also commented on El Salvador’s Bitcoin moves. Recall that BitGo provides the infrastructure for El Salvador’s official Bitcoin wallet the Chivo wallet. However, following the launch, the wallet suffered setbacks There were server capacity errors
Novogratz believes such technical issues are not an issue given the magnitude of the Bitcoin (BTC) project. He opined that they will be solved over time. Rather than focus on the technical problem, Novogratz believes the focus should be on the system’s operation in 6 to 12 weeks.
Novogratz’s comments are in tandem with that of other cryptocurrency analysts who pointed to overleveraged traders after the Bitcoin price crash.