Despite Major Bitcoin Losses, Former Goldman Sachs Partner Remains Steadfast On His Crypto Faith
Despite Bitcoin Losses, Former Goldman Sachs Partner Remains Steadfast On His Faith In Cryptocurrency
Mike Novogratz is notorious for many things – his time as a partner in Goldman Sachs, as a hedge fund manager, as a billionaire, and as a trigger for the crypto movement. Bitcoin was seen as a fraud still in September last year by many experts, including Jamie Dimon. However, Novo, a moniker given to this trader, correctly predicted a much different path – that Bitcoin would reach $10,000 without ceasing.
Sure enough, Bitcoin reached nearly $20,000 by year’s end in 2017, giving Novo some major confidence on his next moves. He told the public that he’d be working on a project called Galaxy Digital Holdings Ltd, which would be a crypto merchant bank. However, the price didn’t last, and Bitcoin started on a major downward trend by January 2018. The merchant bank was the victim of about $136 million in losses over trading, but Novo hasn’t lost sight of his goals or his faith.
Calling himself “the ugly face” of crypto in an interview with Bloomberg, Novo explained that most people thought that the December prices would be reflective of a bear market. He explained that he was confident, even after losses brought down bitcoin to $6,200, that Bitcoin would hold. However, Bitcoin Cash’s forks did a lot of damage that prevented these profits, followed by the way that the SEC started to aggressively pursue initial coin offerings.
The interview posed a question, regarding why Novo moved over to invest in Bitcoin in the early days. He called the industry “interesting,” adding, “What macro guys do is try to make complicated things simple. It was macro markets on steroids. I’d never seen something go parabolic on a log chart before.” However, he separates himself from much of the community, saying,
“While I believe in the underlying technology and believe in the crypto movement, when prices get stupid, I sell. A lot of my friends in crypto just couldn’t let go. They were saying, ‘This is going to change the world.’ Revolutions don’t happen overnight. I’d be walking down the street, and people would come up to me wanting to take selfies. That’s when I started to think, OK, this is weird. It’s got to be close to the top.”
In Novo’s opinion, which has been right plenty of times before, he sees the market for ICOs as being “pretty much dead.” The rampant fraud and hype didn’t match up with the hope that many investors had for making more money. While the SEC doesn’t want to stop the innovation in the market, ICOs have been a major subject of regulation, which means that the industry is more likely to see growth with less fanfare.
When it comes to Novo, his career, and crypto, the natural question is “What’s next?” Novo replied, “
We’ve invested in a company called High Fidelity, which is a virtual world. Me and you, we’ll sit down, and we’ll have virtual beers. People think I’m crazy when I say that, but Second Life does $500 million a year of GDP, real money traded back and forth in a virtual world with old technology. That’ll be the first use case where blockchain really works.”