Mike Novogratz, founder and CEO of crypto investment firm Galaxy Digital Capital Management is confident that cryptocurrency market will soon leave the doldrums and exceed highs of 2017.
Novogratz, one of the revered investors in the crypto space, laid out clear reasons why bitcoin and other cryptocurrencies are set for another interesting bull run.
Institutional Investors are Key
2018 has seen more than a fair share of interest from institutional investors in the crypto asset markets. It all started with the approval and subsequent issuance of bitcoin futures contracts towards the end of last year. The Commodities and Futures trade Commission (CFTC) approved Chicago-based exchanges CBOE and CME to issue physically-settled bitcoin futures contracts.
Since then, more and more accredited investors have shown interest in crypto assets leading notable investment banks to consider crypto trading desks and crypt0-based investment vehicles for their clients. This has increases despite the slump in crypto markets since the beginning of the year.
Novogratz predicts that this interest will only increase in 2019 which will lead to a new fear of missing out (FOMO), this time, among institutional investors. “There’s going to be a case of institutional FOMO [fear of missing out], just like there was in retail,” he said according to Financial News London.
FOMO has often been described as one of the major reasons behind the historic cryptocurrency price surge witnessed in 2017. A lot of investors were said to have jumped on the crypto bandwagon without full understand of the crypto space because they didn’t want to miss out on the opportunities provided by crypto assets. As the price continued to go up, more investors were encouraged to get in.
Novogratz suggests this will be the case with institutional investors. He noted, however, that bitcoin will have to take out a resistance at $6,800, and possibly end the year between $8,800 and $9,000. When this happens, the former Goldman Sachs investment banker, says bitcoin will be on its way to record highs.
Regulations Will Benefit Crypto Market
In recent times, the crypto space has become subject to intense scrutiny from governments globally. While these regulations go contrary to the tenet of decentralization, Novogratz suggests it could benefit the crypto market and boost crypto prices.
This is because regulations help rid the space of scams and fraudulent activities associated with cryptos thereby increasing investor confidence in the space. This works in tandem with the influx of institutional investors who are used to operating in regulated markets and not accustomed to crypto-related risks.
Breaking the $10,000 mark
The $10,000 mark hold a big significance among cryptocurrency enthusiast who believe that cryptocurrency markets will go on to full recovery once bitcoin surpasses the mark. Bitcoin which is currently trading at $6,430 is often used as a compass for crypto markets as it is the dominant crypto asset as it makes up more than half of the total value of the entire crypto market.
In the past, Novogratz have suggested that bitcoin will break the $10,000 mark by the second quarter of 2019. He is even more optimistic now.
“By the end of the first quarter we will take out $10,000 and after that, we will go back to new highs — to $20,000 or more.”
A Crypto Bull Run is Already in Progress
As Smartereum reported, a recent analysis by Data analysis platform Santinent shows that there’s a new bull run in the cryptocurrency market. While the focus is usually on bitcoin [BTC], Santinent observed that crypto assets launched under the ethereum blockchain were effectively decoupled from ether—that is, their prices no longer reflect that of ether. These tokens which have achieved ‘independence’ have witnessed surges in prices up to 20 percent.