The price of bitcoin has corrected by 27.7 percent from its year-to-date high of $13,868.44. And the stark drop is making a billionaire investor nervous.
A Nail-Biting Novogratz
Galaxy Digital founder and chief executive Michael Novogratz today admitted that he would be worried if bitcoin’s near-term downtrend continues any further. The former hedge fund manager noted that price falling below the $8,500 level is not good news. And a close below the $6,000 is certainly worst.
Will #btc ever go back to $5K? “I don’t think so. I think if it goes below $8,500 I'll get nervous. If it goes below $6,000 I'll get real nervous,” says @Novogratz pic.twitter.com/oWMdGTtZYU
— Squawk Box (@SquawkCNBC) August 1, 2019
Novogratz did not offer any clarity about why he thinks bitcoin below $6,000 is terrible. Nevertheless, he stressed that the $5,000 level would cap the cryptocurrency from falling further.
Bitcoin’s $10K Floor Failed?
The statement appeared over a month after Novogratz had admitted selling some of his bitcoin stash around $14,000. In the same breath, he had predicted that the cryptocurrency would trend sideways in a $10,000-$14,000 range.
However, the price started plummeting in early July as a part of a natural downside correction. Investors also digested the anti-crypto comments made by US President Donald Trump on July 11, followed by US Treasury Secretary Steven Mnuchin’s press brief, wherein he called bitcoin “a national security issue.”
Bitcoin uptrend also got punctured due to Libra hearings on the Capitol Hill. The congressional meetings saw Facebook executive David Marcus responding to sharply-pointed queries of US lawmakers. While the social media giant eventually planned to shelve its Libra cryptocurrency plans, its senate-level trial raised the selling pressure in the bitcoin market, which had already factored in the gains that came after the Libra announcement in mid-June.
That somewhat explains why Novogratz, in his latest interview with CNBC, predicted the bitcoin price with caution. As usual, the Crypto Twitter was not impressed with all the nervousness.
Nervous about what? If your a long term believer you want to buy when it goes on sale. Nervous? Makes no sense. You get nervous when it went up in a straight line a while back. This guy has it all backwards.
— Zack Lorah (@LorahZack) August 1, 2019
He’s a hindsight analyst ?
— Psychedelic El ₿arto ? (@PsychedelicBart) August 1, 2019
Even Fed Can Get Nervous
Even in his nervousness, Novogratz believed bitcoin as an asset and protocol are heading in the right direction. He discussed that the cryptocurrency does not need to put its mouth into the lion’s hunt, i.e., it should not attempt to take away the market share of the US dollar. Excerpts”
“If bitcoin starts to eat away all the dollar’ [space], the Federal Reserve would be very nervous, and that’s why, I think, they are more focused on Libra or other stablecoin projects.”
Instead, Novogratz added, bitcoin backers should use the “digital gold” narrative so, for regulators, the cryptocurrency becomes like any other asset they need to regulate.
As for a potential bitcoin ban, Novogratz thinks the US and European governments are not thinking in that direction.
Know your customer and anti-money laundering is being [really] strictly enforced here in the U.S. and Europe,” he said. “The good news is there are lots of institutional players that are coming into the space that is going to make access much easier for credible players.
Do you think there’s any cause for Novogratz’s concern? Let us know your thoughts in the comment section below!
Images via Shutterstock, Twitter @SquawkCNBC, video via Youtube @Wallstreet Dope