Tech
BlackRock, Worldcoin, Ripple: Bitcoin Advocate Mike Novogratz Talks Cryptocurrencies
As Bitcoin surges again after a year of scandals and losses in the cryptocurrency industry, Mike Novogratz says there’s one man in particular who gives him reason to remain optimistic.
“The most important thing that happened this year in Bitcoin is Larry Fink,” Novogratz said, referring to the investment titan chief executive officer of BlackRock Inc., the world’s largest asset manager.
BlackRock excited the cryptocurrency community in June when it filed to launch an exchange-traded fund to track the spot price of bitcoin, a move that, if approved, could potentially spark a new wave of investment in the sector. cryptocurrencyBut it was Fink’s apparent conversion from cryptocurrency skeptic to Bitcoin believer (he now considers it an “international asset”) that really excited Novogratz.
“It’s been ‘orange-pilled,’ as we say. The orange pill is when you take a non-believer and make them a believer in Bitcoin,” Novogratz, CEO of Galaxy Digital Holdings, told David Rubenstein in an interview this week for an upcoming episode of Bloomberg Wealth. “Larry didn’t believe it. Now he says, ‘Hey, this is going to be a global currency.’ People all over the world trust it.”
The push for BlackRock’s ETF and Fink’s evolving stance are part of an “adoption cycle” that Novogratz said could help the coin surpass its all-time high of nearly $69,000 reached in 2021, especially if accompanied by an eventual shift by the Federal Reserve toward rate cuts. Bitcoin has hovered between $29,000 and $30,000 this week after rising more than 70% since the start of the year.
Novogratz, in a wide-ranging conversation at Galaxy’s offices in lower Manhattan, also said a recent ruling in the Securities and Exchange Commission’s Ripple Labs case was a “huge victory” for cryptocurrency, and touched on topics ranging from Sam Altman’s Worldcoin visual scanning project to Galaxy’s commitment to maintaining a presence in New York.
One of the most ardent supporters of cryptocurrencies since Wall StreetNovogratz, former partner of Goldman Sachs Consulting Firm Group Inc. and Fortress Investment Group, first purchased Bitcoin when it was trading at around $100. In 2018, he founded Galaxy Digital, which provides financial services such as trading, investing banking and asset management in the cryptocurrency sector.
Novogratz’s reputation took a hit last year when a cryptocurrency project he backed, the Luna token invented by South Korean entrepreneur Do Kwon as part of an algorithmic stablecoin experiment, blew up, triggering a series of crashes in the sector. The now-infamous tattoo on his arm, a wolf howling at the moon with the word “Luna,” serves as a “good reminder of hubris,” Novogratz said.
Artificial Intelligence Hype
His advice today, for someone with $100,000 to invest: “If they were young and had a high risk tolerance, I would buy Alibaba stock. I would buy silver, gold, Bitcoin and Ethereum. That would be my portfolio.” Those with a lower risk tolerance should put 30% in a portfolio like that and 70% in bonds and maybe an index fund, he said.
Asked if Worldcoin would take off, Novogratz said, “You don’t want to bet against Sam Altman right now.” (Altman, Worldcoin’s co-founder, is also behind AI sensation ChatGPT.) Worldcoin uses a small device called an “orb” to scan people’s eyeballs to generate a unique digital identity for use online. A token issued by the project more than doubled in value at launch this week, before retreating from those highs. It was trading at $2.20 as of 6:30 p.m. in New York on Friday.
“I think the price could potentially go up a lot, because there’s an AI hype cycle,” Novogratz said. “I don’t know if we’re all going to use this as our identity.”
A flurry of SEC enforcement actions against major cryptocurrency firms this year has rattled many in the industry. Novogratz said the court’s recent ruling in the SEC’s Ripple case — the judge found Ripple’s XRP token a security in some cases but not in others — was a victory for the cryptocurrency industry because it shows “the rules are not clear at all.”
As for Galaxy itself, even as it moves parts of its business overseas, it remains committed to New York. “I don’t see us not being in the U.S. or not being in New York,” Novogratz said.
To see the full interview with Novogratz, watch Bloomberg Wealth with David Rubenstein on Tuesday, August 8 at 9:00 p.m. ET on Bloomberg Television.