Bitcoin, which has been grinding around the $10,000 resistance over the last few months, recently surrendered around $500 in a matter of minutes to trade below $10K. Despite the pullback that could put a number of people in panic mode, bitcoin permabull and founder of crypto merchant bank Mike Novogratz says there is no reason to doubt the bull market.
Bitcoin Has Performed As Well
The former Goldman Sachs partner, now the darling of the crypto community, spoke on Bloomberg TV and noted that besides trading sideways during the week, bitcoin is up 200 percent in year-to-date (YTD) performance.
Unlike the broader market which consists of altcoins, bitcoin is in a league of its own and has done the job for investors.
“Bitcoin started the year at $3,800, traded at $3,500 and now it’s at $10,200 and so it’s up 200% odd percent already,” he told Bloomberg before adding that the leading digital currency is consolidating after a bullish run.
“It has had a huge run, and so I think this is a bit of consolidation.”
Bitcoin is up 200 percent since the beginning of the year / Source: TradingView
Novogratz, whose firm buys bitcoin during pullbacks, said the cryptocurrencies need between five to six years before they can have an impact on people’s lives. This month, the bitcoin bull said macroeconomic turbulence will swing bitcoin prices favorably and vowed that he will never sell any of his bitcoin holding below $14,000.
Bitcoin’s price reached its 17-month high on June 26 when each unit topped $13,600. Ever since then, its price has largely between locked above $10K.
This year’s rally is the latest twist in the bitcoin tale characterized by volatility. Bitcoin’s value tanked by 74 percent last year after surging 1,400 percent in 2017.
Institutions Will Join The Party At Some Point
Novogratz said bitcoin is gearing up for its next leg run and its when he thinks “institutions will start coming in,” although “they’re slowly and steadily moving in.”
Novogratz took the liberty to go back down the memory lane of 2017 when bitcoin’s unprecedented run saw the digital asset’s price reach a high of nearly $20K before surrendering its gains in a spectacular fashion.
“What 2017 did, that crazy bull market, is it got people unrealistic expectations on how fast the blockchain revolution, the crypto revolution is actually going to happen,” said Novogratz. “You gotta give them some more runway before we give them a thumbs up or thumbs down.”
Novogratz pointed out that Peloton Interactive, a startup that filed for its initial public offering
(IPO) this week, took eight years to get where it is today. In contrast, the majority of cryptocurrencies have been around for much shorter periods of time.
He believes that bitcoin is a niche case. It is a finished product and this is one of the major reasons why it has outperformed altcoins this year. Bitcoin dominates 69 percent of the market at the time of writing. Peter Schiff, a gold bug and long-time bitcoin critic, warned in August that BTC’s rising dominance is a sign of bad things to come, even for the leading digital currency itself.
Many crypto believers are hoping that regulators will come to the party by approving bitcoin-oriented products. For example, the approval of a bitcoin exchange-traded product could sway change the sentiments of institutions as they will believe that regulators are comfortable with the digital asset.
The crypto industry received a major boost when Bakkt announced on August 16 that it will be launching its product in September
Writing in a blog post, Bakkt CEO Kelly Loeffler said their “vision will be realized on September 23 when Bakkt launches custody and physically-delivered daily and monthly bitcoin futures contracts in partnership with ICE Futures U.S. and ICE Clear US.”
Novogratz said the industry is no longer a backwater experiment but part of the financial system and regulators need to come on board.