On Tuesday (December 8), billionaire investor Mike Novogratz explained why he believes that institutional interest in Bitcoin is only going to increase and how much crypto exposure new investors should have.
Former hedge fund manager Novogratz is the Founder and CEO of Galaxy Digital, “a diversified financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sector.”
His comments came during an interview with CNN anchor Julia Chatterley earlier today.
Chatterley first asked Novogratz why Bitcoin had gone from a “frontier investment” to a macro asset in the past few years.
Novogratz replied:
“Everyone is now looking at Bitcoin as a form of digital gold, or as a hedge against the debasement of fiat currency. The institutionalization of getting good custody, of getting people comfortable that they understood it, that it was safe, happened over the last few years, and now it’s arrived, and we’ve seen nothing but more and more accounts trying to get involved.
“Every single crypto business like mine is working at breakneck speed because just onboarding all the new accounts from high net worth to institutions to pension funds to endowments.”
He also talked about how he sees crypto going mainstream:
“People are going to hold their value, their dollars, their Bitcoin, their movie tickets on their phones, and you know, the banks are going to have to rush into this space, and you’re starting to see it. PayPal was a was a huge event this year… you’re gonna see every single financial institution forced into this space.”
Other than Bitcoin (which he sees as a wonderful store of value and therefore “a really safe investment for people”), in the cyptoasset space, Novogratz also has invested in Etherereum:
“I think Ethereum still has more of a venture flair to it but it’s an investment we like.”
He also likes the decentralized finance (DeFi) sector:
“This is much more for the experts, but I think in five or ten years, really the revolution is going to happen by taking the blockchain and bringing it to finance, and so we’re investing a lot of wonderful, you know, smaller projects.”
As for his investment advice to his clients, he tells them:
“Mostly bitcoin, some Ethereum, and then in venture… a lot of those [i.e. altcoins] won’t have a lot of value and some will have a ton of value.”
For people who have never invested in crypto before, Novogratz used tothem to put 1-2% of their net worth into Bitcoin, but he says that now he has changed his tune on that a little bit, and these days he feels comfortable advising new investors to put 5% of their net worth into Bitcoin since Bitcoin’s “not going back to zero”–even though it could fall to as low as $13,000–since there is “too much infrastructure” and “too much of a community that believes in this as a store of value”, which is why he belives that Bitcoin is going to have lower volatility in the future.
Finally, Chatterly asked Novogratz how much of his personal net worth was invested in Bitcoin.
He replied:
“As a proportion of my net worth, overall crypto exposure is probably 50%.”
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