Former Goldman Sachs partner, Mike Novogratz, who is also the founder of crypto merchant bank Galaxy digital, argued that Bitcoin (BTC) occupies a special place in the crypto world; while on an interview with Bloomberg TV.
While reflecting on the proliferation of various crypto assets, a lot of which have tried to attempt to compete with Bitcoin’s (BTC) function as store of value, Novogratz argued that.
“There’s 118 elements on the periodic table, and only one gold. Bitcoin is going to be digital gold, a place where you have sovereign money, it’s not U.S. money, it’s not Chinese money, and it’s sovereign. Sovereignty costs a lot, it should.”
While he did not provide a rationale for him singling out Bitcoin as Gold’s closest equivalent, he said that while Blockchain in principle offers a robust system for secure exchange, not all crypto-currencies need to rely on its maximal security potential.
Bitcoin’s stagnation at around the $3400-$3600 mark, hasn’t changed Mike’s mind about the potential of the virtual currency. Mike cites the $8000 mark as a soon to be realized medium term price point. He however is of the opinion that the market is going to bubble back up. He also reflected on how painful the crypto price bubbles can be, and how much the current crypto climate provides clarity.
According to him, now that the crypto noise has subsided along with inflated valuations of thousands of digital assets, the industry has the leg room to undergo an important structural shift. This shift according to him will be from a people’s revolution to an institutional led one.
Mike notes that with the calming of the crypto waters compared to what was experienced in 2017, has led to crypto becoming more comfortable to institutional investors thanks to reduced volatility. Although Institutional adoption has largely slowed down in the wake of the ongoing government shutdown , forthcoming custodial solutions from New york stock exchange (NYSE) operator ICE’s Bakkt platform and investment giant Fidelity’s digital asset business indicate that institutional investments in crypto are just getting started according to Mike.
While traditional financial entities like Fidelity are now making bold forays into crypto, veteran crypto firms such as Coinbase and Crypto exchange have also unveiled their own custody solutions that will serve institutional clients.
These moves by veteran crypto firms reinforce Mike Novogratz’s assertion that cryptos are going to be comparable to Gold when it comes to storage of value. The infrastructure being created surely supports this opinion.
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