Billionaire investor Mike Novogratz said that bitcoin has more room to soar even though this month’s more-than-50 percent surge in the digital currency exhibits all the signs of a market peak.
"This feels like what a speculative top feels like," Novogratz, chief executive officer of Galaxy Investment Partners, said in a Thursday interview in Toronto after speaking at a conference hosted by GMP Capital Inc. “The only reason I’m not sure -- and it might be the top for a short period of time -- is that it’s a big world, and the market cap isn’t nearly big enough for it to be the top of the whole system."
Novogratz said he sold some bitcoin in the morning and tried later, but couldn’t because of problems executing his trades. Despite the feeling of staggering heights, he said bitcoin still has room to climb.
“One of the reasons that it might not be the top, in the short run even, is that usually markets end with exhaustion when there are no buyers left," Novogratz said, adding this week’s surge isn’t there. “They can’t process the amount of buyers that want in, and so I don’t think it’s the top. I think it could have been just speculative frenzy."
Novogratz’s comments echo previous sentiments on the prospects of cryptocurrencies and bitcoin, in which he’s repeatedly said it’s a bubble that’ll likely burst though he doesn’t care given the long-term prospects of the industry. After the recent “euphoria,” Novogratz said he now considers that bitcoin could reach $50,000 by the end of next year -- upping his previous estimate of $40,000.
He doesn’t see any immediate signs of a bubble bursting, because the crypto-asset hasn’t yet attracted institutional investors or pension funds.
"Bubbles don’t end until the buyers are all in, until there’s leverage and there’s no leverage in this system yet," Novogratz said. “I think that’s what you wait for."
Still, he’d like to see some of the volatility of trading bitcoin dissipate.
“I hope it calms down a bit just to give people a chance to breathe," he said. “Market participants can’t keep up with the frenetic pace."
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