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Aug 28, 2019

Novogratz compares crypto to Peloton while preaching patience

Bitcoin weakens but still strongest among crypto assets: Novogratz

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Billionaire investor Mike Novogratz says Bitcoin’s getting ready for its next leg up.

“I think it’s when institutions start coming in,” the chief executive officer of Galaxy Digital Holdings Ltd. told Bloomberg Television on Wednesday, adding that greater adoption by mainstream companies takes longer than many think. But, “they’re slowly and steadily moving in.”

Novogratz, who said his firm buys Bitcoin during pullbacks but has a core exposure that it holds onto, said it could take another five to six years before cryptocurrencies start to impact people’s lives.

“What 2017 did, that crazy bull market, is it got people unrealistic expectations on how fast the blockchain revolution, the crypto revolution is actually going to happen,” he said. “You gotta give them some more runway before we give them the thumbs up or thumbs down.”

Peloton Interactive Inc., a home exercise startup that filed for an initial public offering this week, took close to eight years to get to that point, said Novogratz, who was one of the company’s seed investors. On the other hand, many cryptocurrencies have been active for much shorter periods of time. But Bitcoin is a niche case, a finished product, which is why it’s outperforming alternative coins this year, he said.

Bitcoin has gained close to 180 per cent this year on expectations of wider mainstream acceptance, among other things. Alternative coins have also gained, with tokens including Litecoin and Bitcoin Cash each more than doubling.

This year’s crypto rally is the latest swing in the volatile market for digital assets. Bitcoin tumbled 74 per cent in 2018, after surging 1,400 per cent the prior year.

Many crypto evangelists are now holding out hope that regulators will give a nod to the staying power of digital assets by approving crypto-oriented products. An approval of a Bitcoin exchange-traded product, for instance, could reshape investor attitudes toward cryptocurrencies by signaling that policy makers are getting more comfortable with them.

“This is not like a backwater experiment anymore, this is part of the financial infrastructure,” said Novogratz. “It’s time for the regulators to catch up.”

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