Bitcoin Could Consolidate for Weeks, Says Novogratz

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In Brief
  • Galaxy Digital CEO Mike Novogratz said that both bitcoin and ethereum could consolidate around their current positions.

  • Novogratz also spoke about Tesla’s decision to drop bitcoin payments.

  • Galaxy Digital recently doubled their quarterly net income, according to their latest financial results.

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In an interview with Bloomberg, Galaxy Digital CEO Mike Novogratz said both bitcoin (BTC) and ethereum (ETH) could consolidate around their current positions.

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First, Novogratz said he thought bitcoin would consolidate “somewhere between $40,000 and $55,000 for the next chapter.” He said it would need to consolidate, before building up enough momentum to surpass $55,000 price level. This could take anywhere between four and six weeks. He added that Galaxy was buying around $42,000, its lowest point since February.

When asked about ethereum’s next move, Novogratz first remarked how it jumped from $800 to $4,000 in five months. “It’s had a great run,” he said. “And so if it consolidates here for a while between 3,000 and 4,000, that’s probably pretty healthy.”

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Novogratz added that ethereum would receive an update this summer, which will likely facilitate increased usage. The Galaxy CEO also emphasized the blockchain’s potential by acknowledging its “triple whammy” of hosting stablecoins, decentralized finance (DeFi) protocols and non-fungible tokens (NFTs).

Environmental impact of businesses

The conversation also strayed to Tesla’s decision to suspend accepting bitcoin as payment, due to environmental concerns. Novogratz recognized Tesla CEO Elon Musk as an important figure in American business and an icon in the crypto world. He added that Musk’s concern over bitcoin’s energy use applied to sustainability awareness throughout all industries. 

“And so I think you’re going to see a response from this industry like you should see a response from every industry,” he said. He said companies will likely consider how to offset their impact, before a paradigm shift to mostly sustainable resources, which Novogratz believes is “seven, eight years away.”

This consideration from Novogratz echoes a report released by Galaxy Digital. The report notes that bitcoin consumes less energy than gold, banks, and other financial systems.

Galaxy’s business

Meanwhile, Galaxy Digital reported another consecutive record quarter, doubling its net income to $860 million from $336 million during the previous quarter. Novogratz also highlighted the company’s recent acquisition of BitGo.

During the interview, he related that his company is not bitcoin-specific, but rather “invested across the ecosystem.” He highlighted the company’s mining capacities, its venture capital business, as well as investment in DeFi and NFTs.

During the earnings call, he dubbed Galaxy, “a growth business, in a growth industry.” At over $2 trillion, he emphasized that crypto’s total market cap was half a percent of global wealth. He anticipates this figure rising to 2% to 4% in the coming years, “and so that’s where the Galaxy bet is.”

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Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

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