Bitcoin’s rising price brings the prospect of increased government scrutiny, but governments aren’t going to have an easy time regulating bitcoin, Michael Novogratz, CEO of Galaxy Investment Partners, told CNBC in a recent “Power Lunch” interview.
Novogratz, a former hedge fund manager at Fortress Investment, is creating a $500 million fund to invest in cryptocurrencies. He said it is not likely that governments will be able to dismantle bitcoin should they attempt to do so.
Given bitcoin’s recent gains, Novogratz said he can see the cryptocurrency price getting as high as $25,000, alarming government officials. He noted that regulators in many countries, including the U.S., are working with digital currency and find it intriguing.
Novogratz said bitcoin is in a “speculative frenzy” phase that is global.
Autonomous Next, a financial research firm, reported that at least 171 “cryptofunds” have launched, including 123 in 2017 alone.
Cboe Global Markets will launch bitcoin futures on Sunday, while CME’s bitcoin futures is scheduled to launch on Dec. 18. Such investments will bring bitcoin closer to being viewed as a legitimate asset class among the investment community.
Novogratz predicted there will be cryptocurrencies for ride sharing, cloud sharing and other uses.
Novogratz recently said that there may be a bubble in bitcoin in certain regions, but the cryptocurrency itself isn’t a bubble. He further noted there have been many bubbles in the past around innovative and revolutionary technologies such as the Internet.
The dotcom bubble, for instance, overvalued projects by significant margins, with several companies selling at billions of dollars by owning a domain or an online business.
But the Internet itself was not a bubble. It has transformed every industry in the world by revolutionizing communication and processing of information. There was a bubble around Internet, as demonstrated by the dotcom era, however the technology itself was not a bubble, a fraud, or a scam.
Bitcoin’s price has jumped 1,100%% this year, reaching $11,860 Tuesday.
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Last modified: July 13, 2020 3:10 AM UTC