“Right now bitcoin feels a little frenzied, and we could see it surge up, but I think by the end of the year we certainly take out the old highs,” Novogratz, head of cryptocurrency merchant bank Galaxy Digital, said on “Closing Bell.” “Or at least we go to the old highs.”
Bitcoin reached its highest levels on Dec. 15, 2017, when a unit of the cryptocurrency was valued at $19,650. It came crashing down into the $3,000 range the following year, but it has climbed back since then.
This week it eclipsed $10,000 for the first time since September, and it was around $10,330 late Friday afternoon. That represents a more than 40% increase from where it began the year.
“Coming out of the ashes, bitcoin has really developed its own lane as a store of value” compared with other cryptocurrencies, Novogratz said, brushing aside concerns that it could see another spectacular fall.
Novogratz, a former Goldman Sachs macro trader, has long been a bitcoin bull. But he said his present optimism stems from the large amounts of monetary stimulus around the world, particularly in China as a response to the coronavirus.
“The Chinese are about to pull two giant bazookas out and stimulate the heck out of the second-largest economy in the world,” said Novogratz. “That’s going to be good for Chinese stocks at one point, but that stimulus always finds its way around the world. So oil prices end up coming back up, and you get another surge of growth.”
It essentially cuts down the supply of bitcoin coming onto the market, helping to keep a limit on inflation. The process is written into bitcoin’s underlying code, and previous halving events have preceded sizable bitcoin price increases.
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