There are fewer doubters that Bitcoin will hit $10,000 by the end of the year, but what about $40,000 by the end of next year!
That’s the latest prediction from Bitcoin enthusiast and hedge fund manager Michael Novogratz. He made the lofty call Monday evening on media outlet CNBC.
Novogratz’s optimism stems from the wave of institutional investors that are expected to join retail investors in buying the cryptocurrency. This is especially in light of the CME Group launching Bitcoin futures by the end of the year.
Here are some other noteworthy points Novogratz made.
Gold, Currency, Bitcoin
Bitcoin is a digital store of wealth or digit gold. If gold’s market cap is $8 trillion, Novogratz’s said he didn’t understand why Bitcoin couldn’t get there, too.
“I have a sense that this will go a lot further,” Novogratz said, adding that he thought Bitcoin would have a market cap of $1 trillion by the end of next year.
Novogratz made some interesting comments about Bitcoin as a currency, too. The following comments were in relation to his thoughts about the CME’s Bitcoin futures launch.
While this is good news for Bitcoin enthusiasts, in the short run, the future won’t be as exciting as people hope it will because it will take a while to build liquidity, according to Novogratz.
“The real promising part of the future is that when you have a future you’ll need a stock bar up, then all of sudden you’ll have a lending market in bitcoin, and as soon as you have a lending market in bitcoin guess what then you’ll have an interest rate curve in bitcoin .and all of a sudden bitcoin starts looking more as a currency as it ever did.”
It’s very difficult right now; it’s not enough interest in the market to borrow or lend against all these coins, according to Novogratz. The futures market will really accelerate when that happens, Novogratz predicted.
Where to put your money
Novogratz flat out said he was not a fan of Litecoin when asked which cryptos were the best to buy. He referred to the crypto as the “poor man’s Bitcoin.”
Moving on, he said that it’s best to mix your dollars around, adding that his money is roughly in half Bitcoin and half Ethereum. And as far as Ethereum, Novogratz sees its market cap tripling by the end of next year.
In terms of how much of your net worth you should spill into a crypto, Novogratz said you should go with between 1% and 3%. If you are wealthy, and have more to spare, or risk, should go higher to around 5% to 10%.
Like nothing we’ve ever seen
As pundits try to compare cryptos to other commodities, it may not be worth the effort. Says Novogratz:
"What's different about these coins than other commodities [is] there is no supply response here. So it's a speculator's dream in that as buying happens there's no new supply response that comes up. So every price move gets exaggerated. It's going to get exaggerated on the way up. There will be 50 percent corrections. It will get exaggerated on the way down."
At the time of writing, Bitcoin’s price was $9,713, which was within striking distance of the latest record it set Monday of $9732.76.