Crypto finally poised to get institutional money


LONDON • Institutional money should start to flow into cryptocurrencies within the next year, setting the stage for a rally, according to Galaxy Digital Holdings Ltd founder Mike Novogratz.

“All the architecture that institutions need to feel comfortable with this is being put in place,” Novogratz said in an interview on Bloomberg Television. “You’re going to start to see custody coming online” through the middle of March, paving the way for the “smart money” to enter in a serious fashion.

Once there are custody solutions from the likes of Fidelity, which Novogratz said has 200 or 300 customers interested in putting money in crypto, institutions could start to enter the digital-asset space. He caut ioned that money managers wouldn’t all rush in at once, as many would want to see how it goes before committing capital.

“Over the next six to 12 months, you are going to see institutions putting a small amount of their assets” in digital currencies, according to Novogratz, a former hedge fund manager and Goldman Sachs Group Inc partner who has been among the most high-profile Wall Streeters to jump into the crypto craze. “A small amount of institutional assets is a lot of money.”

That inflow, Novogratz said, will set the stage for a rally. He suggested it could take bitcoin to US$8,000 (RM32,480), versus the price of around US$3,582 as of 8:30am in London yesterday.

The digital asset soared above US$19,000 in December 2017 before tumbling precipitously over the next few months. It bottomed at around US$3,136 in December 2018.

Novogratz also said the next run-up was likely to separate bitcoin out from a lot of other cryptocurrencies, reiterating that he thinks it’s going to become “digital gold”. — Bloomberg