Novogratz said Bitcoin and gold is going to surge higher as long as goverment’s liquidity pump continues. Federal stimulus will add liquidity, as both Republicans and Democrats have proposed plans in the trillions of dollars.
Michael Novogratz, Galaxy Digital founder, CEO, and chairman, said Bitcoin will hit $14,000 in the next three months, and could easily reach $20,000 by the end of the year. He predicted that gold will continue to surge as well, as long as the government’s “liquidity pump” continues.
Generally gold is as a safe haven because when stock markets experience downturns gold will likewise retain or rise It does that by bringing modest profits or reducing the losses in a portfolio. Investing in gold won’t bring high profits most of the time, however you can expect less risk. In contrast, Bitcoin keeps exhibiting high volatility, experiencing more than 20% price fluctuation in a week. For investors looking for risk-off mode options, cryptocurrency is not be the best option. Nonetheless Bitcoin brings strong profits and is still a good option for portfolio diversification since it doesn’t correlate to general markets.
In the 70s, president Nixon ended the gold standard to the detriment of having a currency backed by the central banks control. Gold price went from US$35 per ounce in 1971, to a peak of US$180 in late 1974, and incredibly arose to US$850 in January of 1980. Since then, gold had a very volatile adventure, however people decided to keep gold in their portfolio and then it finally reached out the safe haven status it has now. Is Bitcoin following the same path as gold?
“Great bubbles usually end with policy moves,” the investor told CNBC’s “said on the Street.” “It doesn’t look like the Fed is going to raise rates … the liquidity pump story isn’t going to go away. We’re going to get a big stimulus.”
Gold futures rose 2.2% Tuesday to as high as $1,974.40 an ounce. Bitcoin rose 6% to as high as $11,379 per coin, trading near its highest level in a year and they can as a result of liquidity pump.
Novogratz added that retail investors who previously invested on tech stocks can now focus on Bitcoin and gold.
“Bitcoin still has a lot of retail interest in it,” he said. “A lot of that retail interest shifted to the story stocks, to the tech stocks because they were just more fun … yesterday you saw a lot of money shift back over to gold and Bitcoin.”
Novogratz is beginning to see institutional investors focus Bitcoin, but they face a learning curve unlike they may encounter in gold investing.
“Gold has been around for 3,000 years, it’s pretty easy to buy,” he said. “There’s an adoption game in bitcoin that you don’t have in gold. But I like them both.”
The investor said his core positions are in gold, Bitcoin, and silver, and “those are working great.” He estimated that about 20% of his net worth is in bitcoin, so he wants to see the Bitcoin surge much higher. He said gold is more of a 5% position for him.