One of the biggest companies in the cryptocurrency space is Galaxy Digital and the CEO of the firm has said that Bitcoin’s market cap could easily surpass that of gold in the next twenty years.
The Morgan Creek Digital founder Anthony Pompliano sat down with the Galaxy CEO, Mike Novogratz who believes that it is only a matter of time before institutions like Goldman Sachs and Intercontinental Exchange get involved with the industry.
“I know Goldman for instance is gearing up around securities tokens. They’re not doing anything yet, but they’re getting really ready and looking at all the questions on – where would you store them? Do you have to build your own custody, or can you use someone else’s custody? How to get them to work. Listen, the regulatory framework isn’t there yet on security tokens. We’re working really hard on our security token business and we’ve got, I think, some cool things in the hopper.”
If you’ve been keeping up with the crypto space over the past year then you will know who Mike Novogratz is but in case you don’t here is a quick summary. Novogratz is an ex-hedge fund manager formerly of the investment company Fortress Investment Group. In 2007 he was ranked as a billionaire by Forbes but before he joined Fortress he was a partner over at Goldman Sachs.
According to Novogratz, Bitcoin’s upside potential is still pretty strong and traders would be wise to allocate a small percentage of Bitcoin in their portfolio. He said:
“I think the macro case for [Bitcoin] is pretty strong. And so, if you can put a couple percent of your portfolio in, there’s a decent chance it catches wind. Fidelity is just getting set up. Bakkt continues to get delayed a little bit, but it’s not going to be delayed forever. They’re going to be in the game. And there’s lots of other players coming.
Gold’s got an $8 trillion market cap, or a $7.5 trillion market cap. And so, we’re 100x off on that. We’re not going to get there in Bitcoin in the next year or two. But over a 20-year period, could that happen? Easily. Easily. And that’s giving zero optionality to all the other stuff. And so I think it seems like a pretty smart portfolio bet.”
Furthermore, Novogratz spoke on the recent decision by Cboe to press pause on its Bitcoin futures contracts next month.
“The reality is, the CME kicked their butts. And these guys have limited resources on what they’re going to spend their focus, and they decided to spend it elsewhere. Finding leverage in Bitcoin is going to get easier as the architecture in the space gets better. You’re already seeing the lending market around Bitcoin went from 10% to like 3%. So once you can borrow you can short. And so now it’s not so hard to short Bitcoin. It used to be almost impossible to short Bitcoin in 2016… It wasn’t great, but it’s not critical.”