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The billionaire investor Michael Novogratz is resolute when it comes to cryptocurrencies, even after his company has lost millions this year as the embryonic market has continued to lose value.
"It was a horrible bear token market," said Novogratz, founder and CEO of Galaxy Digital Holdings Ltd., in a conference call on Friday. "There's a lot of reasons to be depressed."
But the former Fortress Group hedge fund manager and Goldman Sachs partner has high hopes that cryptic adaptation will become more widespread as early as next year.
"Basically I think you will see a great adaptation in 2019, 2020," he said. "A lot of objects in the digital world, the e-gaming space, are low-value objects so I think people will be more comfortable participating in the blockchain."
"We are making big investments in that area," he added.
The Novogratz encryption bank lost 136 million US dollars in digital assets for the first nine months of the year. Galaxy Digital lost about $ 41 million in the third quarter alone, according to company records. The latest crisis was caused, in part, by the loss of bets in Bitcoin, Ether and XRP, the company said, as well as regulatory developments.
"Part of the sale is due to the fact that, in my opinion, the SEC has become harsh for some fraudulent ICOs," he said. "And not only have they been tough on them – they said that personal investors can go into reparation in most cases, and people got very nervous."
The Securities and Exchange Commission fined two companies this month that had not registered the first money offerings as securities. The agency said that investors are allowed to reclaim their money. But Novogratz said Friday that he sees a silver lining.
"As the rules become clearer with the SEC and other regulatory bodies around the world, it's easier, frankly, to build a business and it's easier for institutions to feel comfortable participating," he said. "We are contacting regulators in the hope of helping to structure some of the rules".
Novogratz was among the highest profile Wall Streeters to jump into cryptic madness, which saw the price of Bitcoin, the largest cryptocurrency, reach a peak of 19,511 USD in mid-December, before falling to about 4,000 dollars in recent times .
"Listen, we had an undeniable sales bubble, it was a frenzy that exploded in December, January," he said on the phone. "We are stuck in the middle now, we are waiting for institutional adoption", which he said could arrive in April.
He referred to the Bakkt futures exchange and the launch of Fidelity in the cryptographic arena with a new digital asset management activity for hedge funds, family offices and commercial companies, both planned for the January launch. "I'll bet by the second quarter, you'll start seeing the real institutional purchases." Novogratz will support that Bitcoin will remain in the $ 3,000- $ 6,000 range until it enters institutional buyers.
He also faced the performance of his company amid the merger in criptovalute. The big losses come from the ICO business of the company and the Galaxy ICO and coins division now accounts for less than 15% of his book, he said.
"The bad news, in trading, was the activities we thought would generate the most stable revenue this year, and we got it wrong," he said. "We also found that getting the right regulatory framework and getting the right technical systems was harder than we thought."
Bloomberg.com
