The cryptocurrency market reached a major milestone this week, passing a $300 billion market cap on optimism that Bitcoin is in a new bull market.
However, billionaire Mike Novogratz thinks this is only the start.
He’s confident the market cap could run to $800 billion in the next 12 months. Part of the reason he has so much confidence is the consumer, which is gradually accepting crypto. Audiences at crypto conferences are increasing, as are the number of businesses associating themselves with the space.
He also said that more institutions are entering this market by investing in crypto companies with venture capital funds.
In attracting institutions, the billionaire did emphasize the importance of custody.
“I think we’ve pretty much bottomed. I’m not positive we’ve bottomed but it feels like we have. …But I do think that we are building a nice bottom for the next move up,” said Novogratz, as quoted by CCN, adding that he believes that it will be accelerated after the addition of custody and better regulations.
He also believes that “the fear of missing out” could push more institutions in as well. In fact, he says the key is for investors to notice big names, like Goldman Sachs, and they will follow suit.
The Fear of Missing Out (FOMO)
Of course, that raises the question – does FOMO (fear of missing out) actually exist?
“That fear drives a lot of investment booms, and nobody knows that better than the biggest stewards of institutional money: hedge funds,” notes The New York Times.
However, Novogratz doesn’t believe we’re there at the moment.”It’s not there yet, there’ll be a tipping point,” he told CNBC. “We’re getting there.” He speculates that this shift will start in the next six to 18 months.
Novogratz also points out that institutional investors are “risk-averse.”
Therefore, the influx of institutional investors in the crypto space, as well as Bitcoin’s recovery from its current slump, both depend on the provision of “custody from a trusted source” and “a little more regulatory clarity,” notes Cryptovest.
Another factor that could send the crypto market cap to $800 billion is the much-anticipated decision on potential ETFs.
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