Why This Former Billionaire And Goldman Sachs Veteran Now Sees Bitcoin Hitting

Bitcoin has surged over the last few weeks, smashing through its 2017 peak and treading fresh ground for the first time in three years.

The bitcoin price has more than doubled in the last two months, a bull run that began when payments giant PayPal

PYPL
announced it would support bitcoin purchases (though with a worrying catch).

Now, former hedge fund billionaire-turned bitcoin and crypto investor, Michael Novogratz, has said he can see bitcoin hitting $50,000 next year—predicting bitcoin will eventually “eclipse gold.”

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“It is easy for me to see bitcoin being at $50,000 next year,” Novogratz told Raoul Pal, the chief executive of financial research and media company Real Vision in an interview last week, explaining: “That is 10% of gold.”

Bitcoin has developed its reputation as digital gold amid the coronavirus pandemic and subsequent unprecedented government spending spree, attracting the attention of a number of big-name investors who see bitcoin as an emerging safe-haven asset and inflation hedge.

“I know once we get to 10% of gold, we are like, why is it only 10% gold,” Novogratz asked. “Why is it not 25% of gold? Then it is going to eclipse gold at one point.”

While Novogratz doesn’t expect bitcoin’s market capitalization to overtake gold soon—”I guarantee it is not going to happen in a year”—he does see recent developments accelerating bitcoin’s growth.

“These things happen faster when you are getting these network effects,” added Novogratz, a former Goldman Sachs veteran who began cryptocurrency investing in 2013 and left Fortress Investment Group in 2015 to focus on bitcoin and crypto.

Last week, British fund manager Ruffer Investment Management revealed it had bought $745 million worth of bitcoin, broadly taken as a sign of rising institutional interest.

Earlier this month, Ray Dalio, the legendary billionaire founder and co-chairman of the world’s biggest hedge fund, Bridgewater Associates, admitted bitcoin has established itself as a “gold-like asset alternative.”

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Meanwhile, Novogratz said he believes the coronavirus pandemic has hastened the coming “cryptocurrency revolution,” pointing to the U.S. government and Federal Reserve’s response and the “digitalization of everything.”

“We are going to…