Mike Novogratz, a major cryptocurrency investor, told CNBC on Wednesday that the bitcoin outage would not be corrected quickly.
The founder of Galaxy Digital said on “Squawk Box” that Bitcoin’s morning dive looks like a surrender.
Novogratz also called it a ‘liquidation event’ as bitcoin fell overnight below $ 40,000 for the first time in 14 weeks, then fell below $ 31,000 at its lowest. in the morning. This has brought the rate down by over 25% in the last 24 hours alone. It’s also a drop of over 50% from last month’s all-time high of nearly $ 65,000.
“Humpty Dumpty never snaps back into place in two days … when it cracks. It’s going to take a while. The market will consolidate. It’ll find a bottom somewhere. Hope it’s close to here.” , Novogratz said, suggesting it could be around $ 36,000 to $ 38,000.
Bitcoin repaired some of the damage later on Wednesday, climbing back above $ 40,000 per token.
“The story has gone nowhere. This crypto revolution has happened, but it’s definitely setbacks for the wallets and for the investor base. People have lost a lot of money, so they’re going to dust themselves off. “, added Novogratz.
Institutional adoption, including companies buying cryptocurrency as an investment, and some financial firms taking steps to provide exposure to their clients, was a factor that had been seen to fuel the boom in bitcoin. at its peak in April.
However, a recent memo from JPMorgan indicates that institutional investors recently ditched bitcoin in favor of gold. When asked about these results by JPMorgan, Novogratz remained optimistic about the long-term adoption board.
“I see a movement. I was with two bank CEOs last month” and both were fascinated by decentralized finance, he added. “I just see an inexorable movement of financial institutions and tech companies into the crypto space.”
Novogratz had told CNBC on Tuesday that he believed bitcoin was likely to consolidate in a practice range of between $ 40,000 and $ 55,000. And while that lower limit has already been crossed, the former hedge fund manager said he sees $ 40,000 as an attractive entry point for buyers.
At Wednesday morning’s low, bitcoin was still up over 215% in the past 12 months and about 6% higher since the start of the year.
Novogratz said he believed several factors were behind Bitcoin’s major pullback in recent weeks, including comments from Tesla CEO Elon Musk, who criticized the cryptocurrency’s environmental impact while announcing that the electric vehicle maker would stop accepting it as payment.
“A lot more people own crypto. Crypto has crept into the pockets of our entire society and you’ve had a confluence of events – a combination of tax day, Elon Musk tweets, etc., where you started. to break down the positivity into the price action, and now we have a liquidation event, ”Novogratz said.