Mike Novogratz — ‘The Herd Is Coming,’ for Real This Time

During a Benzinga Boot Camp in conjunction with BlockFi, Novogratz shared his thoughts with host and podcaster Peter McCormack on how far the cryptocurrency industry has come as well as where it’s likely headed. Institutional investors, of course, will play a big role in the evolution of the market, and according to Novogratz, all signs are pointing toward go. If you think you’ve heard Novogratz say “the herd is coming” before, in reference to the institutional adoption of bitcoin, you’d be correct. The only problem was that the “herd” continued to sit on the sidelines, afraid of dipping their toe into the crypto waters. This time, however, the Galaxy Digital insists the herd really is coming, and he offered numerous reasons for why it really is true this time. He said,

“I kept saying the herd is coming. And I was wrong. It was so slow to come. Now the herd is actually coming. And I see it, I’m getting phone calls every day. And so it’s left me very bullish on the overall space.”

Bridge to Institutions

Galaxy Digital recently took out an ad in the Financial Times to appeal to big investors. And Novogratz said the firm is “staffing up” to better connect and be a bridge with the institutional world.

MicroStrategy: His Favorite Story of the Year

If you were ever wondering what got Novogratz, a Wall Street veteran, into crypto, it was the bitcoin story. He’s a story guy, and that’s what he invested in bitcoin for the first time, as a speculative bet. His conviction has changed over time, and now he owns more bitcoin than he does gold. His favorite story of 2020 has been one that much of crypto land is also cheering, and that is the move by MicroStrategy’s Michael Saylor to go all-in on bitcoin. He applauds Saylor for being a first-mover but adds he is waiting for the second corporate to jump in “because then it steamrolls,” Novogratz said.

Big Investors and DeFi

Novogratz is spending time on the DeFi space, where he says there’s “a lot of cool stuff happening” but not a lot of institutional money yet. He calls it a venture sandbox, similar to bitcoin years ago. DeFi is fine for smart people with capital to be deployed but institutional investors have a fiduciary responsibility to their mom and pop clients. So DeFi is not quite ready for prime time — yet. He says as the institutions come into crypto, “they’re a lot stickier money.” As a result, there is a “changing of the guard” but not one in which one group replaces another. Instead, as the pie grows, the portion of institutions in the crypto space, which two years ago was 2%, is going to slowly start growing. Novogratz said that when it gets to 30-50%, “it’s a whole different market.” The Galaxy Digital chief predicts that in the next two to three years, the bitcoin price will be trading at $50,000 or higher.