As Bitcoin is clawing its way out of last year’s catastrophic crypto winter, there is one reason for investors to remain optimistic – the interest shown in the asset class by institutional investors.
Michael Novogratz, the popular crypto investor and billionaire CEO of cryptocurrency investment management firm Galaxy Digital, says one name from the financial royalty is giving him reasons to stay bullish on Bitcoin. The name in question is Larry Fink, the CEO of BlackRock, the world’s largest asset manager.
BlackRock’s Bitcoin ETF Application Is Bullish For Bitcoin
BlackRock made an announcement last month that took the crypto market by storm. The investment giant that manages assets worth $9 trillion applied for a spot Bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission. If approved, the ETF would spark a new wave of mainstream investment in cryptocurrencies.
Larry Fink was initially skeptical about Bitcoin and cryptocurrency as a whole and even went as far as to say in a 2018 interview that neither his company nor its clients have any interest to invest in the asset class. At the time, the executive said BlackRock will only delve into cryptocurrencies once “established” structures are in place.
Fast forward to 2023, and the BlackRock chief now considers Bitcoin as an “international asset”. Speaking to Fox Business earlier this month, Fink said BTC is not based on “any one currency” and so can represent an asset that people can buy as an alternative to gold or fiat money. He suggested investors could turn to Bitcoin as a hedge against inflation or the devaluation of fiat currencies.
Fink attributed the role of cryptocurrencies largely to digitizing gold and that U.S. regulators are currently considering how an ETF directly linked to the price of Bitcoin could democratize finance.
BlackRock is highly influential in the financial industry and its public endorsement of Bitcoin is key to improving the crypto asset’s price. Most notably, soon after the asset manager filed its Bitcoin ETF with the SEC, there was a short-term uptick in crypto prices with BTC crossing the $30,000 mark.
Bitcoin Designed To Prevail During Times of Economic Turmoil
In an interview with Bloomberg on July 29, Novogratz said that Larry Fink got “orange-pilled”. The orange pill is a terminology used to define people who turned from a Bitcoin skeptic to a believer.
The CEO of Galaxy Digital Holdings noted that BlackRock’s push for a Bitcoin ETF and Fink’s change of opinion is part of an “adoption cycle” that may help BTC reclaim the all-time high it reached in September 2021.
Novogratz also noted that the Federal Reserve may soon start cutting interest rates on the dollar, which will result in crypto prices surging.
In March, the billionaire said that he believes investing in cryptocurrencies would be a smart move as the United States was fast approaching a recession. Speaking of the importance of hoarding hard assets like gold and silver, Novogratz said cryptocurrencies were designed to combat excessive money printing by the government during times of economic turmoil. He recommended going “long” on Bitcoin just as investors would do for gold and silver.
While many analysts say the $20,000 – $30,000 level for Bitcoin signifies a bullish sentiment, Novogratz downplayed the scenario saying it is only a “comfortable zone” for the asset. The Galaxy Investments executive predicts Bitcoin to reach $500,000 by 2027.
XRP Decision A “Huge Victory” For Crypto
The former Goldman Sachs Group partner, also praised the court ruling that went in favor of Ripple Labs in its lawsuit against the SEC, saying it is a “huge victory” for the crypto sector.
In a hearing held earlier this month, a federal judge ruled that cryptocurrencies like Ripple (XRP) cannot be considered securities in instances where they are sold to the public via crypto exchanges, but will be deemed as such in scenarios where the tokens are offered directly by the issuer.
The court decision was a huge blow to the SEC, which has been enforcing stringent securities regulations on crypto service providers in the United States.
Novogratz also shared his thoughts on Sam Altman’s cryptocurrency project – Worldcoin (WLD).
He said the crypto token, which involves users scanning their eyeballs to receive a unique ID that gives them access to a digital wallet, should not be written off as its price can potentially “go a lot higher” due to the current hype surrounding artificial intelligence. Sam Altman, co-founder of Worldcoin, is also the CEO of OpenAI, the artificial intelligence company behind the infamous AI chatbot – ChatGPT.
Galaxy Digital, an asset management company founded in 2018 that provides crypto trading and investment banking services, took a massive hit last year after Terra/Luna – a crypto project supported by the company and its founder – collapsed.
The event cost investors almost $60 billion in losses and set off a chain reaction of events that culminated to become the great crypto winter of 2022 which saw the market lose $500 billion in value.
At the time of writing, Bitcoin (BTC) is trading at $29,384 – up 0.3% in the last 24 hours.