By
Chimamanda U. Martha
April 26th, 2024
The billionaire CEO described the current market level as “frothy”, noting that BTC is experiencing a price discovery phase with the arrival of the ETFs, bringing in “a new army” to test the market.
With Bitcoin (BTC) currently trading above $60,000 for the first time in two years, Galaxy Digital CEO Mike Novogratz said the crypto asset will soon overthrow gold to become the most preferred among investors.
During a Thursday interview with Bloomberg TV, the billionaire CEO expressed his belief that Bitcoin (BTC) has the potential to surpass gold and become the largest store of wealth in history despite the significant difference in market capitalization between the two assets.
Gold currently boasts a market capitalization of $13.79 trillion, while Bitcoin’s market capitalization stands at $1.21 trillion, approximately one-tenth of gold’s value.
Millennials and Gen Z More Likely to Invest in Bitcoin
The speculation stemmed from the immense wealth held by baby boomers, a demographic on the cusp of a significant wealth transfer.
Novogratz pointed out that out of the estimated $85 trillion in wealth held by baby boomers, a substantial portion is managed by registered investors, many of whom now have access to recently approved spot Bitcoin ETFs.
The billionaire investor and co-founder of Galaxy Digital believes that if major investment platforms like BlackRock and Fidelity, which cater to a large number of baby boomers, recommend allocating even a small percentage of assets to Bitcoin, it could result in trillions of dollars flowing into the crypto market.
Novogratz’s optimism is rooted in the evolving dynamics of wealth management. He highlighted that younger investors, particularly Gen Z and millennials, are more inclined towards digital assets like Bitcoin than traditional forms of investment like gold.
He predicted that this shift in investor sentiment could drive significant adoption of Bitcoin in the coming years.
“For every Charlie Munger – God rest his soul – who passed away, that money is finding its way to Gen Z and millennials, and they feel much more comfortable with digital gold than old, clunky gold,” he told Bloomberg.
Novogratz Warns of Possible Market Corrections
Novogratz also discussed Bitcoin’s recent rally, which saw the kingcoin reach $64,000 on Thursday before retracing slightly during the interview. Rather than predict BTC’s next move, he cautioned the crypto asset could undergo corrections before reaching its apex this year to record another all-time high past the $69,000 it saw in 2021.
The billionaire CEO described the current market level as “frothy”, noting that BTC is experiencing a price discovery phase with the arrival of the ETFs, bringing in “a new army” to test the market. Despite the warning, he remains confident that Bitcoin’s price will not drop below the mid-$50,000s before rebounding.
“I wouldn’t be surprised to see some corrections and some consolidation. If it corrects, it might correct to the mid-$50,000s before taking off to the new high,” he said.
Meanwhile, the recent surge in Bitcoin’s price has been attributed to a significant demand for Bitcoin ETFs.
On February 27, these ETFs reported a record-breaking daily trading volume exceeding $7.6 billion. BlackRock’s iShares Bitcoin Trust (IBIT) ETF alone experienced a daily inflow of $520 million, marking it as the largest inflow to date.
The crypto asset is also scheduled to undergo a halving event on April 19, potentially reducing the daily supply of new coins.
Historically, such events have resulted in substantial price increases, with Bitcoin’s price typically peaking six to 12 months later.
