'Everyone should put 2% to 3% of their net worth in bitcoin': Mike Novogratz
Bitcoin (BTC-USD) is back. The most popular cryptocurrency has surpassed $ 19,000 and is approaching the record high of 2017 before a spectacular crash. Longtime cop Mike Novogratz said Bitcoin was a solid buy for everyday investors.
"Bitcoin is for everyone," he said in an interview with Yahoo Finance Live. "Everyone should put 2% to 3% of their net worth into Bitcoin and look at it in five years and it will be a lot more."
Novogratz is a great Bitcoin player and a great character in most of the circles he's been in - Princeton, Wrestling, Goldman Sachs, and Fortress Investments. Before that, he was a more conventional - albeit outsider - hedge fund manager. He launched Galaxy Digital in 2018 to try to build Crypto's institutional trust and, of course, make money.
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At the end of the third quarter, Galaxy Digital had assets of $ 407.4 million under management and the company's digital trading platform processed $ 1.4 billion in trading volume. (In context, Bitcoin's total market capitalization is more than $ 350 billion).
Bitcoin's current rally is much quieter than the last. Google searches for "Bitcoin" peaked in late 2017. You're now running at about a fifth of that level. However, Novogratz said the evidence for Bitcoin prices is better than ever. He said that crypto is likely to be volatile, but that Bitcoin prices shouldn't fall below $ 12,000 this current cycle.
NOT SPECIFIED - OCTOBER 21: In this screenshot, Mike Novogratz speaks during the Hudson River Park Ungala on October 21, 2020. (Photo by Getty Images / Getty Images for Friends of Hudson River Park)
While the last Bitcoin rally was mostly run by individual investors, this time the big boys are playing, Novogratz said. “This rally is being driven by institutions slowly entering space, high net worth individuals, hedge funds and real institutions. Bitcoin is becoming a macro asset. "The participation of these larger players - plus increased regulation - should offset some of Bitcoin's volatility, but not eliminate it.
It's not just Wall Street gamers who delve into crypto. HBO's "Game of Thrones" actress Maisie Williams sparked comparisons with the 2017 high when she conducted a Twitter poll on whether to buy. In the end, she ignored the collective response of her followers.
Regarding crypto regulation, Novogratz said the current view of President-elect Joe Biden for Treasury Secretary Janet Yellen remains to be determined. Former Federal Reserve chairman Yellen said in 2018 that she was "not a fan" and a public skeptic.
"Your approach to viewing Bitcoin as a financial asset for payments wasn't that constructive, but a lot has changed." Novogratz added that their general reluctance should be good for hard assets like gold and bitcoin.
Novogratz's enthusiasm for crypto extends to so-called altcoins, smaller currencies with much less liquidity and volume than Bitcoin or Ethereum, another more established cryptocurrency.
However, he warns that they are not for everyday investors. “You know, you can lose 60% of your money in one day. And so fair warning if you want to play in these things do it small size and know what you are doing, ”he said.
Novogratz's interest also extends far beyond crypto. He is an investor in various projects that focus on therapeutic psychedelics. He also raised money to help defeat President Donald Trump's re-election.
"When I finished a week of ayuhuasca, I thought carefully about it: every politician in the country - in the world - should have to do a week of ayuhuasca," he said. "You will learn about yourself."
Julie Hyman is the co-host of Yahoo Finance Live, 9 am-11pm ET weekdays.
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BTCUSD = X.
ETHUSD = X.
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