(Bloomberg) -- Michael Novogratz is cautioning investors that Bitcoin may see some corrections before rallying to a record and ending the year “much higher.” 

“I wouldn’t be surprised to see some corrections and some consolidation,” Novogratz, the founder and chief executive officer of Galaxy Digital Holdings Ltd., said during an interview on Bloomberg TV Thursday. “If it corrects, it might correct to the mid-$50,000s, before taking off to the new high.”    

He described the current rally as a “price discovery” process with the arrival of Bitcoin exchange-traded funds, which bring in “a new army” of buyers and salespeople. Bitcoin has jumped over 40% already this year atop the successful debut of the ETF products. It was trading around $60,700 on Thursday.    

Compared to the recent bull run in 2021, big institutional players have less leverage in the current cycle, but retail traders are too leveraged, he said, citing leverages offered by offshore crypto trading platforms.

“I think the market is too leveraged right now. It happens after huge runs,” he said. “There will be a wash out. People can’t sustain this much leverage.” He added that for the millennials and Gen-Z investors that are chasing highs, “some will make money and a lot will get wiped out.” 

He predicts that Ether ETFs will be approved by the SEC some time this year. Galaxy, under a partnership with Invesco, is one of the applicants pursuing to offer an Ethereum ETF. 

Asked about Galaxy’s timeline to get listed in the US, he said the US has had an “unfriendly regime” in the last four years, which he doesn’t believe will change until after the election.  

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