Bears, bulls, or something else altogether? Crypto experts weigh in on recent volatility

May 19, 2021 Coin Telegraph

Bitcoin is "not going to bounce right back," said Mike Novogratz right before it bounced back to the $42,000s.

The price of Bitcoin and many cryptocurrencies may have taken a double-digit percentage drop in the last 24 hours, but some crypto experts still seem to be cautiously optimistic about the market as a whole.

In an interview on CNBC’s Squawk Box on Wednesday, Galaxy Digital founder Mike Novogratz said that it was “going to take a while” for crypto markets to consolidate and find a bottom as the price of Bitcoin (BTC) dipped to $30,000 earlier in the day. Novogratz’s comments came when the price of the crypto asset was roughly $38,000, having been more than $42,000 at the close of stock markets yesterday.

"You had a confluence of events: a combination of tax day, Elon Musk tweets, whatnot and we started breaking down the positivity in the price action, and now we’ve got a liquidation event,” said Novogratz. “It's not going to bounce right back, it’ll consolidate for a while.”

"It felt like we had capitulation this morning," says @Novogratz on #bitcoin. "You had a confluence of events a combination of tax day, @elonmusk tweets, what not and we started breaking down the positivity in the price action...it's not going to bounce right back." pic.twitter.com/n0QqjOmh21
— Squawk Box (@SquawkCNBC) May 19, 2021

Though the Galaxy Digital CEO estimated that Bitcoin could hit a bottom at $36,000 or $38,000, the price rebounded slightly to reach $42,434 before sliding back under $40,000. At the time of publication, the price is in the $38,000 range.

There are likely many factors at play concerning the recent crypto market volatility. Cryptocurrency prime broker Genesis Global Trading reported there was a Bitcoin-driven sell-off overnight due to forced liquidations and levered closeouts. Meanwhile, the firm said many Ether (ETH) cash buyers came in when the price of the token dropped under $2,000 for the first time since early April, and macro funds were buying BTC when the price hit $35,000.

“While the initial volumes at the beginning of this morning’s rally off the lows were muted, we're seeing the market stabilize with more consistent institutional appetite,” said Genesis.

Others in the crypto space — including Konstantin Boyko-Romanovsky, CEO and founder of validator node hosting platform Allnodes, and Steve Ehrlich, CEO and co-founder Voyager Digital — said the recent price drops may be attributed to people migrating their investments following reports that China had allegedly banned crypto exchanges, services and transactions. Three associations in the country recently outlined issues related to crypto investments and warned people of the market risks.

“Correction in the cryptocurrency market is a common phenomenon,” said Boyko-Romanovsky. “It doesn’t mean, however, that a bear market is underway. The latter would be the case if the blockchain industry were showing signs of slowing down. That can’t be further from the truth.”

Ehrlich added:

“We are seeing a correction, but this is an opportunity for retail participants to reestablish themselves and increase their positions in the market. Crypto is not going anywhere.”

Banking system consumes two times more energy than Bitcoin: research

May 17, 2021 Coin Telegraph

Adoption

According to Galaxy’s estimates, the annual energy usage of Bitcoin stands at 114 TWh, while the banking industry consumes over 260 TWh each year.

Amid the ongoing concerns over Bitcoin's (BTC) energy consumption, a new study states that the traditional banking system consumes much more energy than the Bitcoin network.

Michael Novogratz’s cryptocurrency firm Galaxy Digital released a report Friday titled “On Bitcoin’s Energy Consumption: A Quantitative Approach to a Subjective Question,” providing open-source access to its methodology and calculations.

Compiled by Galaxy’s mining arm, the study estimates Bitcoin’s annual electricity consumption to stand at 113.89 TWh, including energy for miner demand, miner power consumption, pool power consumption, and node power consumption. This amount is at least two times lower than the total energy consumed by the banking system as well as the gold industry on an annual basis, according to Galaxy’s estimations.

While Bitcoin’s energy consumption is transparent and easy to track in real time using tools like Cambridge Bitcoin Electricity Consumption Index, the evaluation of energy usage of the gold industry and the traditional financial system is not that straightforward, Galaxy Digital Mining stated.

“The banking industry does not directly report electricity consumption data,” the report says, adding that the retail and commercial banking system requires multiple settlement layers, while Bitcoin offers final settlement. Given Galaxy’s estimations of power usage by banking data centers, bank branches, ATMs, and card network’s data centers, the total annual energy consumption of the banking system is estimated to be 263.72 TWh globally.

In order to calculate the energy consumption of the gold industry, Galaxy Digital Mining implemented estimates for the industry’s total greenhouse gases emissions provided in the World’s Gold Council’s report titled “Gold and climate change: Current and future impacts.” As estimated in the study, the gold industry utilizes roughly 240.61 TWh per year. “These estimates may exclude key sources of energy use and emissions that are second order effects of the gold industry like the energy and carbon intensity of the tires used in gold mines,” Galaxy noted.

Galaxy Digital’s analysis on Bitcoin’s energy consumption comes amid a major crypto market crash that follows Tesla CEO Elon Musk’s decision to stop accepting BTC as payment for car purchases due to environmental concerns. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” the CEO wrote on Twitter last week.

Musk’s move spurred wide-scale criticism from the crypto community, with some stating that SpaceX would have to switch it rockets to “more sustainable energy” in order to not “look like a clueless big hypocrite.”

Crypto markets shed over $500 billion after Musk took to Twitter with his announcement, with Bitcoin today slipping below $43,000 for the first time since early February. The exec apparently brought more stress to the market by hinting that Tesla has plans to dump Bitcoin from its balance sheet soon.

Banking System Uses Significantly More Energy Than Bitcoin, Research Shows

May 17, 2021 Bitcoin.com

Does Mike Novogratz hold more than $5B in crypto?

May 13, 2021 Coin Telegraph

Does Mike Novogratz hold more than B in crypto?

Business

In a recent interview, the Galaxy Digital founder said his crypto investments amounted to 85% of his net worth.

Galaxy Digital founder and CEO Mike Novogratz, a billionaire active in the digital asset space, says up to 85% of his net worth is in cryptocurrencies.

In an interview with New York Magazine’s Intelligencer published today, Novogratz said that while he did have roughly 30% of his net worth in crypto starting at the 2017 bull run, the recent price surges in the crypto space had increased the valuation of his holdings, making them “up to 85 percent“ of the billionaire investor’s net worth. According to Bloomberg, Novogratz is valued at $6.25 billion as of May 12, meaning his crypto could potentially be worth $5.3 billion.

This estimate would purportedly include Novogratz’s personal holdings and potentially ownership of crypto firms — Galaxy Digital announced last week it would acquire institutional crypto custodian service and wallet operator BitGo for $1.2 billion. The CEO added that while he might be a HODLer, his lifestyle made such investments possible:

"I’m lucky enough that I had wealth outside of crypto wealth. I’m as bullish as I’ve been on the space. But I see lots of people that have gone from one lifestyle to having the possibility of really having changed their life. And I’m like, guys, be prudent, take a little bit off the table."

It’s unclear what effect the recent volatility in both Bitcoin (BTC) and Ether (ETH) may have had on Novogratz’s holdings. The price of many cryptocurrencies dropped suddenly yesterday as Elon Musk announced Tesla would suspend its support for vehicle purchases in BTC. This downturn preceded Bloomberg reporting that Binance was under investigation by both the U.S. Justice Department and Internal Revenue Service.

At the time of publication, the BTC price is $49,096, having fallen more than 9% in the last 24 hours. While Novogratz predicted “of course” ETH could reach a price of $5,000, the token is seeing a similar downturn to BTC, falling 9% in the last 24 hours to reach $3,706.

“The last five months have kind of rocked our worlds in terms of what percentage of our net worth is in crypto,” said the Galaxy Digital CEO. “Cryptos had a move that is a once-in-a-generation move. And I think people should understand that it’s not going to keep happening over and over. Like this idea that we’ve gone from not-an-asset-class to an asset class only can happen once.”

Mike Novogratz