Despite Bitcoin price crash, BTC is the internet of value transfer: Novogratz

Bitcoin

Retail investors had good reasons to overextend in the crypto market, says billionaire Bitcoin bull Mike Novogratz.

The crypto market is back to major price swings followed by a Bitcoin (BTC) price crash on Tuesday, the day the largest cryptocurrency became legal tender in El Salvador. But it was not unexpected for many crypto veterans, including Galaxy Digital CEO Mike Novogratz.

Speaking to Bloomberg, the billionaire Bitcoin bull said that crypto is still dominated by retail investors, who are “too excited” by the recent interest from institutions like Visa and Amazon.

People are realizing that “crypto is not just Bitcoin being bought as a hedge against bad monetary fiscal policy,” he said. “But maybe, more importantly, it’s Web 3.0. It’s the internet of value transfer.”

Retail investors got too long on leverage for good reason, according to Novogratz, who highlighted recent crypto-friendly news from finance and retail giants, such as Visa buying nonfungible tokens and describing them as a promising medium, and Walmart’s pursuit of a crypto product lead, along with the job postings from Amazon for crypto experts.

“There is a realization that this is a technology and no investor wants to miss the next internet. This is the next internet.”

Novogratz said that investors got too excited and the price drop on Sept. 7 was “a little air being popped out of the balloon.”

As his company Galaxy Digital is planning to complete its acquisition of BitGo, the infrastructure provider of El Salvador’s official Bitcoin wallet, Novogratz also commented on the plagued start of the Chivo wallet.

The state-issued Chivo wallet experienced server capacity errors, but Novogratz believes the technical problems will be resolved over time. He said that the real question is how the system will work in six or 12 weeks, adding that doing such projects at scale is not easy.

Novogratz’s comments align with several analysts who pointed to overleveraged traders after the Bitcoin price crash. The largest cryptocurrency took a sharp dive to $43,000 on Sept. 7, liquidating more than $3.54 billion in derivative markets. BTC is hovering around $45,000 at press time.

<div>China's miner exodus a ‘big net positive for crypto,’ Mike Novogratz says</div>

Bitcoin

Despite China's undermining, Bitcoin still exists and survives in lots of ways, Galaxy Digital's CEO says.

As major miners are leaving China one after another following the country’s crackdown on Bitcoin (BTC), Galaxy Digital CEO Mike Novogratz has echoed other experts in seeing the migration out of China as a positive development.

Novogratz explained on Bloomberg that despite China’s attempt to undermine Bitcoin — like banning mining, banning leverage, and even banning Bitcoin in some places — the original cryptocurrency is still alive and kicking. “Bitcoin still exists and survives in lots of ways,” he said, adding that miners’ migration out of China could be “a big net positive for the ecosystem.”

The last couple of weeks, where the crypto market experienced high volatility with sudden price crashes across the board, was an amazingly successful test for the crypto ecosystem as a whole, according to Novogratz.

“We had a crash,” Novogratz summarized, referring to the 65% drop in Bitcoin price from the all-time highs, adding:

“We didn’t have the plunge protection team. We didn’t have lawsuits. The system worked how it was supposed to work. It is a very robust system that has been built in a small amount of time.”

Speaking on the public perception of the crypto ecosystem, Novogratz singled out Bitcoin as “it carved out its lane” as digital gold. Gold has existed for 3,000 years, he reminded, adding, “I expect Bitcoin to be the digital version of gold for the next 3,000 years.”

Novogratz said that he thinks “Ethereum most likely becomes the second biggest, or maybe even the biggest cryptocurrency one day.” It’s going to be used at the base level of trust, he summarized, “The Web 3.0 where things get built on top of it.” He noted that it has strong competitors like Terra and Solana and it’s not an assured win for Ethereum.

Novogratz also listed more recent additions to the crypto ecosystem, like decentralized finance and nonfungible tokens before concluding:

“This is not us punting on coins with funny names. This is a serious approach to rebuild the financial architecture of the world.”

Mike