Novogratz Suspends $500M Crypto Hedge Fund Launch

Galaxy Investment Partners CEO Michael Novogratz has delayed his plan to launch a $500 million cryptocurrency hedge fund, owing to current market conditions. Speaking to CNBC, Novogratz said:

"We were supposed to launch on December 15th and we paused. I didn't like the market conditions as a starting point to take other investors' money."

"We are still feverishly building out a full merchant bank for crypto, i.e., I am still very bullish on the space."

Novogratz initially announced the Galaxy Digital Assets Fund earlier this year; the macro manager intended to put in $150 million of his own, and raise the remaining $350. At $500 million, the crypto fund was set to be the biggest of its kind.

Novogratz has adopted a famously bullish stance on cryptocurrencies. Last month, just as Bitcoin crossed the $8,000 milestone, he predicted the cryptocurrency would end the year at $10,000. In addition, he claimed Bitcoin would hit $40,000 by the end of 2018, and later increased that amount to $50,000.

"This is going to be the largest bubble of our lifetimes. Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it."

He also went on to add that “bubbles start around ideas that are often right”, and predicted that Bitcoin would survive as a store of value.

However, it seems Novogratz has now had a change of heart, and the current state of the crypto market is to blame.

Having smashed through the $20,000 barrier just days ago, Bitcoin has since been in free-fall mode, having shed around $8,000 in a matter of five days, with altcoins feeling the sting. Some of the factors that are likely responsible for Bitcoin’s correction include the ridiculously high transaction fees and delays, traders cashing out ahead of the holidays, and investors taking profits for Christmas.

While the current scenario has put him on the back foot as far as the crypto fund is concerned, and he foresees Bitcoin dropping as low as $8,000 in the most extreme case, Novogratz took to Twitter to claim that the drop is nothing more than the crypto market taking a temporary pause:

"Looks to me like a short term top is in. My hunch is we consolidate between 10-16k for a while. Extreme would be 8k. Bull market isn’t over. Just pausing."