Mike Novogratz, a well-known successful hedge fund manager, believes that Bitcoin will finish the year at a $10,000 valuation. The popular cryptocurrency recently peaked at just over $11,000, which Novogratz feels is a scratch on the surface of a highly lucrative market. The former Fortress Investment Group manager is so confident in Bitcoin, he started a $500 million fund to invest in cryptocurrencies. His eyes are also on Ethereum, which he believes will trade at $600 come the end of 2017.
Novogratz likened Bitcoin to gold because we give it value as a society. Since it has a limited supply, it is given even more value, especially as more and more Bitcoins are mined. As with any innovative venture, Bitcoin has had its lows. There have been 3 separate occasions where the value dropped at least 25%. Bitcoin bounced back after each time, which Novogratz says expresses the cryptocurrencies’ reflexive nature. The emergence of Bitcoin Cash, a result of a recent software fork, has opened doors to new possibility with the alternative currency.
Part of the reason why Bitcoin is growing is that it is more applicable in different markets, one of which being online gambling. You can now find exclusive Bitcoin and Bitcoin Cash gambling sites offering casino games, poker and sports betting. Specialized technologies like Provably Fair, which allows users to test the fairness of the games they are playing, are generating a revolution in the online gambling community. These Bitcoin gambling sites are getting more popular amongst gamblers, which furthers the notion of Bitcoin rising in value, as more gamblers are beginning to use it as their primary currency.
There is some speculation that a bubble could potentially see Bitcoin’s value plummet, but Novogratz believes this a product of the mistrust instilled in people after the 2008 housing market collapse. The explosive rise of Bitcoin’s value has led to some doubt, but this is common practice for new investments. Novogratz thinks that people should stay their course, because if they cash out too early on their profits, they could potentially be missing out on something larger.
This $500 million investment fund that Novogratz has dedicated to cryptocurrencies reflects the newfound acceptance of digital currencies from some Wall Street types. There is still opposition to Bitcoin from large financial enterprises, but their disapproval may be a result of their lack of control on the market. After all, Bitcoin operates on a decentralized peer-to-peer network, which means large financial institutions can’t profit off it. Novogratz believes this is a product of stubborn investors refusing to embrace the digital revolution.
With more than 100 hedge funds specifically targeting cryptocurrencies, it is clear this this financial revolution is more than just a blip on the radar. Bitcoin is the most popular digital currency, but it is not the only one. There are many opportunities for investors, users and vendors. Whether you are into online gambling with Bitcoin or Bitcoin Cash, a causal investor or a financial heavyweight like Novogratz, cryptocurrencies are not worth ignoring.