Former Goldman Sachs and Fortress trader and billionaire investor, Mike Novogratz, believes strongly that the cryptocurrency market is undergoing a major correction. Therefore, he expects the digital coin market to rebound during the middle of the current year. On top of this, he also thinks that the virtual currency market would surpass the previous lifetime highs. The views are in sharp contrast to other billionaire investor and investment guru, Warren Buffett, who thinks that the digital coin does not produce anything to warrant a valuation. He also sees the price to drop further.
$20 Trillion Market
Novogratz also disclosed during a Bloomberg Invest Summit in New York that the digital coin market would reach as much as $20 trillion in the region, according to ccn.com report. The interview with him focused on the cryptocurrency market economics and the criticisms or skepticisms it has received from pessimists. Those who are not favoring the digital currency market termed the rapid increase in the valuation of most of the virtual currency as a bubble-like trend. This included the leading digital coin bitcoin that suffered more than 50 percent erosion in value after hitting close to $20,000 in December last year.
The billionaire investor was not ready to accept that it was a bubble in January for bitcoin or ethereum or any other virtual currencies. He pointed out the dot-com bubble that reduced the valuation to just $1 trillion from $6 trillion during the period of 1999. His primary contention is that he expects the digital currency market to rebound after a big correction to reach the $20 trillion market valuation. The total cryptocurrency market value was near $900 billion at the peak time of December 2017.
Novogratz expectation meant that the digital coin market could see an increase of 20-fold from the previous lifetime highs. 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.” He believes that the recent rally was driven by individual and retail traders.
He pointed out that there has been growing demand for virtual currencies from institutional investors and that the investments from them are insignificant currently. The billionaire investor is often considered as an optimist of cryptocurrency market and that his evaluation was based on statistics and real indicators. One of the issues that prevented institutional investors from entering the digital coin market is the custodian solutions.
Since a number of businesses have started to offer solutions like Susquehanna, it would be a question of time before they enter the market. Novogratz indicated that the market value would not reach $20 trillion straightaway. However, it would happen once pension funds started acquiring them apart from resolving the custodian issues. Significantly, at least two technocrats think that bitcoin would become the single biggest currency in a decade.