mike novogratz bitcoin price prediction

Hedge fund legend Mike Novogratz predicts that the bitcoin price could “easily” reach $40,000 by the end of 2018, while ethereum is poised to experience a threefold gain during the same timeframe.

“Bitcoin could be at $40,000 at the end of 2018. It easily could,” the former Fortress manager said Monday on CNBC’s “Fast Money,” noting that the asset has significant upside due to its utility as “digital gold”.

Mike Novogratz on Bitcoin

Previously, Novogratz had forecast that bitcoin would reach $10,000 by the end of 2017. Although the global average bitcoin price had not quite broached that threshold at the time of writing, bitcoin had reached the five-figure mark on several South Korean exchanges.

bitcoin price
Source: Coinbase

Bitcoin has increased more than 1,200 percent for the year, and Novogratz believes that rally will continue into 2018 — albeit at a somewhat more conservative pace — on the heels of increased institutional activity within the crypto markets.

“There’s a big wave of money coming, not just here but all around the world,” he said.

Novogratz aims to facilitate that wave through Galaxy Investment Partners, a $500 million crypto asset hedge fund he is launching next year.

He expects that the introduction of these new market participants could help bitcoin “easily” reach $40,000, which would raise its market cap to approximately $670 billion.

But although bitcoin will remain the “crypto king,” Novogratz believes other cryptocurrencies — including ethereum — will catch its tailwinds and experience phenomenal growth as well.

“Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well,” he added, predicting that the second largest cryptocurrency could see a threefold increase from its present level.The ethereum price reached a new all-time high of $493 on Monday and is currently trading at $477 on U.S. exchange Coinbase.

However, he cautioned that although the market’s present upward trajectory will continue, so will its volatility, and he said that he would not be surprised if the markets experience a steep correction in the short-term.

“What’s different about these coins than other commodities … there is no supply response here,” Novogratz said. “So it’s a speculator’s dream in that as buying happens there’s no new supply response that comes up. So every price move gets exaggerated. It’s going to get exaggerated on the way up. There will be 50 percent corrections. It will get exaggerated on the way down.”

Nevertheless, Novogratz believes that the market’s fundamentals will resist these bearish hesitations, enabling the combined value of all cryptocurrencies to rise as high as $2 trillion in 2018 from their present value of $300 billion.

bitcoin price

Hedge fund legend Mike Novogratz used last weekend’s bitcoin price decline as an opportunity to deepen his BTC position by $15 million to $20 million.

Speaking at the Reuters Global Investment 2018 Outlook Summit Novogratz — a billionaire macro trader and former principal at Fortress Investment Group — explained that he sees the recent bitcoin price decline as a buying opportunity, not a cause for concern.

After peaking above $7,700 on November 8, the bitcoin price crashed in the aftermath of the indefinite suspension of bitcoin scaling proposal SegWit2x, which had been scheduled to activate this week. The global average bitcoin price tumbled approximately $2,200, eventually reaching a November low of $5,519 on November 12, according to CoinMarketcap.

bitcoin price
Source: BitcoinWisdom

This unexpected bearish turn left many investors panicking, but Novogratz says that he bought between $15 million and $20 million worth of bitcoin during the dip. Despite the weekend pullback, he believes the bitcoin price will reach $10,000 by March on the heels of increased attention from institutional investors. He says the herd will arrive once a mainstream firm begins offering crypto assets as investment options.

“When it’s that easy, the price of bitcoin or ethereum is going to go much higher. And that is a lot closer than people think,” he said, adding that it could happen within the next six months.

Novogratz recently announced the creation of Galaxy Investment Partners, a blockchain-focused hedge fund whose largest single position is in bitcoin. He has invested approximately $100 million of his own capital in the fund, and he intends to raise $500 million, which will make Galaxy the largest fund of its kind.

March is still four months away — an eternity in the crypto economy — so it remains to be seen whether Novogratz’s price target will be realized. However, his bullish bet is already paying off. The bitcoin price has already recovered by more than $1,000 since Sunday. Depending on when he placed his buy orders, the value of his weekend purchases may have already increased by several million dollars.