By
Steve Muchoki
April 4th, 2024
While some traditional investors try to discourage people from investing into cryptocurrencies, Mike Novogratz believes that investing in crypto is a must.
Founder and CEO of Galaxy Digital Capital Management, Bitcoin bull Michael Novogratz believes that every investor should invest into cryptocurrencies.
“It’s almost essential for every investor to have at least 1% to 2% of their portfolio” in crypto, said Novogratz in his recent interview, adding that not to invest into Bitcoin is “almost irresponsible”.
Last week it became known that Novogratz’s firm Galaxy Digital Capital Management and Bloomberg had established partnership and launched a cryptocurrency index called the Bloomberg Galaxy Crypto Index. This index is tracking the performance of 10 biggest cryptocurrencies, including Bitcoin and Ethereum.
Explaining his interest to cryptocurrencies and his belief into the importance of investing in them, Novogratz said that the main reason is not in potential profit that one could gain, but in opportunities that cryptocurrencies’ underlying blockchain technologies opens for the world.
Novogratz emphasized that these technologies, that now enable companies to carry out and record transactions almost instantly, “in two to four years are going to give every vertical a challenge.” Being actively integrated in a number of various industries, blockchain technology is able to change the total image of products and services that we are accustomed to.
Novogratz, who is a former hedge fund manager at Fortress Investment Group and a partner of Goldman Sachs, also informed that in 2017 he has invested 10% of his net worth into cryptos.
It is also known that traditional financial institutions today are searching for the most appropriate ways to help traditional investors to get benefits from Bitcoin. For example, in April Nasdaq concluded an agreement with cryptocurrency exchange Gemini Trust.
Nevertheless, still there is little understanding how the future of crypto will look like, as governments’ plans for crypto regulations remain unclear.
Novogratz believes that less than in six months we will see active participation of the New York Stock Exchange in cryptocurrency trading. But as we have already mentioned earlier, not all financial gurus agree with Novogratz. For example, Warren Buffett called bitcoin “probably rat poison squared” while Bill Gates feels like shorting Bitcoin.
Novogratz explained the difference in opinion by the age gap. “In a lot of ways, this is a Millennial-led revolution … what I’ve found is guys with gray hair [are] much more skeptical.”
This year, Novogratz has managed to raise $250 million to launch a cryptocurrency merchant bank named Galaxy Digital. The investment firm is said to open a cryptocurrency trading desk, provide asset management and advising services, and make investments into developing blockchain projects and ICOs. Novogratz hopes to make Galaxy Digital merchant bank the “Goldman Sachs of crypto”.
Galaxy Digital has already revealed its plans to buy Canadian startup First Coin Capital and then merge with Bradmer Pharmaceuticals the shares of which are publicly listed on the Toronto-based TSX Venture Exchange.