At the June edition of the “Bloomberg Invest Summit” in New York this week, Mike Novogratz told Bloomberg’s Erik Schatzker that the cryptocurrency market is moving toward a $20 trillion market cap. But who is Mike Novogratz, and what makes him so confident in such a radical crypto market expansion?
The cryptocurrency market cap is currently around $342 billion, although its peak valuation, reached in early January of this year was $795.8 billion. Since then, the decision by Facebook, Google and Twitter to ban all forms of crypto advertising from their platforms has greatly harmed the digital currency market. For example, news of Facebook’s impending decision to ban crypto advertising began to circulate in early January, and by January 30, when Facebook’s decision became official, some $340 billion and been sliced off the value of the combined crypto market.
Despite its current predicament, billionaire investor Mike Novogratz firmly believes that far from shrinking into oblivion, the cryptocurrency market is in fact steadily moving toward an eventual market cap value of $20 trillion.
Who Is Mike Novogratz?
53-year old New Yorker Mike Novogratz is a Princeton graduate, a decorated collegiate wrestler, and a former soldier in the U.S. Army National Guard. His business portfolio shows that Novogratz was a partner at Goldman Sachs before becoming hedge fund manager for the Fortress Investment Group, leaving that company in 2008.
A billionaire in his own right, Novogratz now spends his days on the board of directors of numerous good causes and corporations including the Hudson River Park Trust, the Federal Reserve Bank of New York’s Investment Advisory Committee, Beat the Streets (promoting wrestling in inner city areas), the Acumen Fund, the NYU Langone Medical Center, the Princeton Varsity Club, Boards of Creative Alternatives of New York, PAX, the School for Strings, and The Jazz Foundation of America.
Bloomberg Invest Summit June 2018
Earlier this week, Novogratz was interviewed on stage by Erik Schatzker as part of the June edition of the “Bloomberg Invest Summit” held in New York. The interview mainly focused on the current economics of the crypto market.
At one point, Schatzker asked Novogratz his opinion on the criticism the industry received as regarding the market’s rapid expansion of 2017, which led to the so-called “Bitcoin Bubble” of early 2018.
Novogratz’ response was candid; he said that if January 2018 “Bull Rally” by Bitcoin, Ethereum, and other cryptocurrencies is considered a bubble, it mirrors the 1996 “dot com bubble”. That bubble would be followed by the much larger 1999 bubble which led to the dot com market receiving a valuation of $6 trillion, before crashing and levelling off to more logical $1 trillion valuation.
In that respect argued Novogratz, crypto’s January 2018 bubble may well be the predecessor to a much larger bubble in the coming years.
Novogratz’ “$20 Trillion” Comment
Further on in the interview, Novogratz stated that in his opinion, the cryptocurrency market will definitely rebound from its mid-2018 slump, and eventually it will surpass its previous all-time highs to reach a $20 trillion market valuation. Here’s what he said:
“Cryptocurrency is a global revolution. The internet bubble was only a US thing. It was rich US people participating. Cryptocurrency is global. There are kids in Bangladesh buying coins. It is monstrous in Tokyo, in South Korea, in China, in India, and in Russia. We’ve got a global market and a global mania. This will feel like a bubble when we’re at $20 trillion.”
While Novogratz is by his own admission a cryptocurrency devotee, his $20 trillion crypto market evaluation is based on sound research, statistics and a deep knowledge and understanding of the industry.
Novogratz stressed that the crypto market wouldn’t get to its $20 trillion evaluation overnight, but once big business and institutional investors began pumping their money into the industry, a market cap of $20 trillion would soon be obtained.
“It won’t go there right away. What is going to happen is, one of these intrepid pension funds, somebody who is a market leader, is going to say, you know what? We’ve got custody, Goldman Sachs is involved, Bloomberg has an index I can track my performance against, and they’re going to buy. And all of the sudden, the second guy buys. The same FOMO that you saw in retail will be demonstrated by institutional investors.”