The cryptocurrency analyst and former Goldmans Sachs, said that virtual currencies and the market could reach $20 trillion dollars, but it will not be easy to arrive at that number.
During a conversation with Erik Schatzker at the Bloomberg Invest Summit, he said that the cryptocurrency market is headed towards $20 trillion dollars.
Mike Novogratz @novogratz fantastic interview with Bloomberg. Very bullish but realistic view on cryptocurrency market. Institutional investors haven't arrived yet, but they will in the long-term.
"This will feel like a bubble when we're $20 trillion."https://t.co/6g5TrF3CPZ
— Joseph Young (@iamjosephyoung) June 8, 2018
He explained that the cryptocurrency surge in late 2017 and in January 2018, can be compared to the rapid increase dot com enterprises had in 1996 when later they experienced the bubble in 1999.
Moreover, Novogratz stated that the market will be reaching new all time highs and eventually register a $20 trillion market valuation. That means that the market would have to increase more than 20 times from its previous peak near to $900 billion dollars.
Michael Novogratz explained about that:
“[Cryptocurrency] is a global revolution. The internet bubble was only a US thing. It was rich US people participating. [Cryptocurrncy] 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.”
Currently, cryptocurrencies have a total market capitalization of $344.8 billion dollars. It would have to increase 60 times so as to reach the number Novogratz is expecting.
But the magnate is an important analyst that makes his predictions based on real indicators, statistics and mathematics, which may indicate that he is realistic in what he comments about the market.
Additionally, he emphasized that there are several institutional investors placing their funds in virtual currencies, but actual investment is non-existent right now. The latest bull run was related to retail and individual investors and not by institutions.
In order for institutions and wealthier investors to enter the market will be very important to have better custodial services and solutions. Even when some companies started to build these products, institutions will start to invest in the mid-term.
“It won’t go there ($20 trillion) tight away,” commented Mr. Novogratz.
“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.”
He said that the same FOMO (fear of missing out) will be experienced this time by institutions and important investors.