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M. Novogratz – BTC adoption for institutions is coming

Mike Novogratz, founder and CEO of Galaxy Investments Partners talked to CNN last week about the growth of digital assets.

He argued that with the increased interest from financial institutions and corporations, Bitcoin and other cryptocurrencies have gone from being a frontier investment to a macro asset and a hedge for fiat currency in the last few years. According to him:

People see Bitcoin as digital gold.

Furthermore, Novogratz stated that as the cryptocurrency becomes more mainstream, people will move from bank accounts to wallets, forcing more and more banks and financial institutions to adapt to the “digitalization of everything” and the new digital infrastructure.

PayPal [launching its own crypto exchange] was a huge event this year, and you’re going to see every single financial institution forced into this space.

PayPal announced its plans on enabling users to buy and sell cryptocurrency earlier this year, setting off a bull run that led to a new all-time high in late November. This move will arguably have a huge impact on the inevitable mainstream adaption of cryptocurrencies.

Cryptocurrencies are notorious for being highly volatile, and the limited utility as an instrument of exchange has arguably had a negative effect on mainstream adaption. With its 346 million active accounts and 26 million merchants around the world, PayPal’s embrace of cryptocurrencies is bound to affect the general view on digital currencies by the everyday user.

The industry has seen massive growth in decentralized finance (DeFi) the last year as the total value locked surpassed $14B in early December, mainly on the Ether blockchain.

This confirms Novogratz’s argument. A stronger infrastructure and a bigger community with an underlying belief in cryptocurrencies as a store value will force traditional financial markets to move to the blockchain and the DeFi sector.

This confirms Novogratz’s argument. A stronger infrastructure and a bigger community with an underlying belief in cryptocurrencies as a store value will force traditional financial markets to move to the blockchain and the DeFi sector.

As more and more central banks issue their own digital currencies, all of a sudden, you’re going to trade digital dollars for digital euros. This infrastructure is the same infrastructure that the crypto community is building, and it doesn’t exist right now in the traditional banks.

The former hedge fund manager also changed his previous recommendation on how much investors should hold in cryptocurrencies, moving away from his former advice of 1% earlier this year. About a month ago, he advocated for 3%, while he now has upped his recommendations to as much as 5% of their total investments. Novogratz himself takes it even further, revealing that he holds roughly 50% of his own net worth in Bitcoin and other cryptocurrencies.

He sees Bitcoin as a “really safe investment”. But he also mentions Ethereum and other venture projects as exiting investments, as he expects a revolution in finance moving to the blockchain within five to ten years.

And his advice to investors looking to the world of crypto?

Mostly Bitcoin, some Ethereum, and then in the venture. A lot of those [altcoins] won’t have a lot of value and some will have a ton of value.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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