Mike Novogratz Shelves $500 Million Crypto Hedge Fund as Bitcoin Price Plunges

bitcoin price

Billionaire trader Mike Novogratz said that he had shelved plans to launch a $500 million crypto hedge fund after the cryptocurrency markets entered a $180 billion tailspin on Friday.

Novogratz Shelves $500 Million Crypto Hedge Fund as Bitcoin Price Retraces

Novogratz, a former Fortress principal, had stated on Dec. 12 that he intended to launch Galaxy Investment Partners “by the end of the week,” rapidly moving up a timetable that had originally planned the fund’s launch for the first quarter of next year. With a $500 million target, the crypto hedge fund was expected to be the largest of its kind.

However, on Friday the long-time bitcoin bull revealed that he had not only not launched Galaxy Investment Partners last week as planned but had also shelved the crypto hedge fund indefinitely, according to a Bloomberg report.

“We didn’t like market conditions and we wanted to re-evaluate what we’re doing,” Novogratz said in a phone interview. “I look pretty smart pressing the pause button right now.”

The revelation of the abrupt reversal comes as the cryptocurrency markets have entered a severe correction following a parabolic run-up. After reaching an all-time high of $19,891 on Dec. 17, the bitcoin price plunged to a nearly three-week low of $10,700 on Friday morning, according to data from Bitfinex.

‘When Insiders Sell It Always Is Important’

Novogratz — who recently predicted that the bitcoin price would hit $40,000 in 2018 — said that he now believes the bitcoin price could retrace as far as $8,000 before resuming its bullish rally.

“Looks to me like a short-term top is in,” he wrote on Twitter. “My hunch is we consolidate between 10-16k for a while. Extreme would be 8k. Bull market isn’t over. Just pausing.”

Elsewhere on Twitter, he appeared to lay part of the blame for the correction on Litecoin creator Charlie Lee, who revealed earlier this week that — to avoid a “conflict of interest” — he had sold his entire LTC balance and donated the proceeds to undisclosed organizations.

“When insiders sell it always is important,” Novogratz said.

Featured Image from Bloomberg/YouTube

Bitcoin Cash Price Storms to $850 After SegWit2x Fails to Activate

bitcoin cash price

The bitcoin cash price has exploded this week following the indefinite suspension of the SegWit2x hard fork that was scheduled to activate on the main bitcoin blockchain next week.

Earlier this week, advocates for the on-chain scaling proposal SegWit2x called for the hard fork’s cancellation due to a likelihood that it would cause Bitcoin to split into two competing cryptocurrencies. The suspension of SegWit2x ensures that, at least until a scaling solution is implemented, bitcoin transaction fees will remain high.

This development has led bitcoin cash proponents to declare victory over what they call “Legacy Bitcoin,” with Bitcoin Classic developer Tom Zander even suggesting that bitcoin cash will be known simply as “bitcoin” within six months.

And, apparently, traders and investors are at least moderately bullish on this prospect, because the coin that claims to be the true heir to Satoshi’s vision has initiated a phenomenal rally, even as bitcoin, ethereum, and most other prominent cryptocurrencies are bleeding.

The bitcoin cash price has surged by nearly $200 in the past day alone — a rise of more than 30%. For the past month, the bitcoin cash price is up more than 150%. Bitcoin cash is currently trading at a global average of $849, giving the coin a $14.2 billion market cap and positioning it to soar past the all-time high near $900 it set shortly after its creation in mid-August.

bitcoin cash price
Source: CoinMarketCap

The majority of bitcoin cash demand is concentrated on cryptocurrency exchanges located in South Korea. Three of the four highest-volume bitcoin cash exchanges are located in the country, and they combine to account for more than two-thirds of the coin’s $3 billion daily trading volume.

bitcoin cash price
Source: CoinMarketCap

It is unclear whether the bitcoin cash price will be able to sustain this rally, but it will likely depend on how merchants respond to rising bitcoin transaction fees.

Much of the bullishness surrounding bitcoin cash stems from speculation that — even if bitcoin continues to be treated like “digital gold” — bitcoin cash can become the cryptocurrency of choice for everyday transactions. To wit, decentralized marketplace OpenBazaar revealed yesterday that it will no longer support bitcoin exclusively but will actively explore other payment options that offer more reasonable transaction fees.

However, time will tell whether that void is filled by bitcoin cash, another cryptocurrency such as monero, or even bitcoin itself once off-chain scaling solutions like Lightning are integrated into the network.