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Mike Novogratz: Crypto Evangelist or ‘Pump-and-Dumper?’

3 mins
Updated by Adam James
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Mike Novogratz hasn’t officially been a billionaire in over a decade. In fact, he hasn’t held that status at any point in his cryptocurrency investment journey. However, he remains not only one of the cryptocurrency market’s largest investors but also a vocal proponent of the enormous investment potential of blockchain technology.
Many of crypto’s biggest investors have lost even more than they invested, and Novogratz is no exception. Yet he sounds almost lighthearted about the current state of the market. This may be the healthiest approach possible to cryptocurrency investing at the moment, given the brutal bear market crypto has been mired under over the past twelve months. Novogratz was an early Wall Street convert to cryptocurrency. An investment banker/hedge fund manager, he worked at powerhouses such as Goldman Sachs and Fortress Investment Group, where he managed both hedge funds and international investing. During his tenure at these firms, he primarily specialized in the highly speculative world of macro investments. This may be another reason he is so comfortable in the blockchain space — where very little is concrete, yet the investment earning potential is nearly limitless.

Galaxy and Bloomberg Playing Together

Since 2016, Novogratz has been primarily focused on his role as the CEO of Galaxy Investment Partners, where he specializes in cryptocurrency investments. In May 2018, Galaxy announced a partnership with Bloomberg itself, launching the Bloomberg Galaxy Crypto Index (BGCI). This index was created to track the top ten highest performing digital currencies — the market majority. The BGCI index represents a need within cryptocurrency for increased transparency through data sharing and standardization. The lack of trusted data sources and price indexes is an issue institutional investors have long identified. A need like this is not the sort of thing that fades with time or is replaced by another product. In spearheading this project, Novogratz has demonstrated a strong commitment to supporting this community he has embraced. Over the past year, Galaxy’s trading losses have hit $136 million. Novogratz attributes many of these losses to unexpected market events such as the second Bitcoin Cash hard fork in Nov 2018. He additionally cites the two SEC sanctions on ICOs for lack of compliance with the regulatory standards set forth for securities and the fear that elicited amongst start-ups and investors alike. When asked about the mania surrounding Bitcoin’s steep climb toward $20,000 last year, Novogratz expresses a positive, yet refreshingly realistic, viewpoint of the overall market for bitcoin and crypto. As some of his peers, especially from Wall Street, are issuing dire predictions in the range of zero, Novogratz describes a saner, more stable outcome for the crypto market.

Devious motives?

While the investor/trader is clearly bullish on crypto, some have speculated that his motives for positive outlooks for crypto are anything but scientific — instead motivated by the desire to see the market increase enough to unload his current holdings. This sort of ‘pump and dump’ scheme has been widely touted, particularly among the less-than-honest crypto users, over the past year. Investors will purchase tokens at low prices, release fake or overly inflated news, and then sell at the high — leaving unwary and uneducated investors holding the bag as the market collapses around them. Instances like this are clearly not isolated to the crypto world, with massive frauds and market manipulation occurring on Wall Street as well. The conclusion? Do your homework, understand the fundamentals, and invest wisely. Think Novogratz is a schemer wanting to dump his crypto holdings, or a genuine crypto evangelist with a penchant for the positive? Let us know in the comments below! 
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With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.