With major cryptocurrencies bleeding out in the past day, fear seems to be taking over the market. However, the CEO of Galaxy Digital and Bitcoin Bull Mike Novogratz is optimistic for the medium and long term. In an interview for CNBC, Novogratz spoke about the danger of being short Dogecoin, BTC, and made some predictions on their prices.
Up 314.9% in the 30-day chart and 24% over the week, DOGE is an asset hold by those on the “same movement” that gave GameStop (GME) stocks a fresh drive. Led by the subreddit r/Wallstreetbets, GME’s persistent rally placed some Wall Street big players on the other side of a bad trade. Novogratz believes DOGE is fuel by a similar excitement. Galaxy Digital CEO said:
Dogecoin speaks to a lot of the same movement that GameStop did. There is a kind of crazy excitement around very young investors, around meme coins and meme ideas. It’s shocking to me that GameStop continues to hold any value… Dogecoin is even more bizarre in that respect.
Novogratz added that interest rate at 0%, a percentage used by banks and other entities to measure the amount to be charged on a loan, serves as a catalyst for the DOGE or Gamestop craze. As investors desperately look for assets capable of providing them with yield.
Dogecoin has disadvantages, as a large amount of its supply hold by single entities, said Novogratz. Adding that he personally would not buy the cryptocurrency, he acknowledged the potential for it to offer potential gains:
I’ve been wrong about DOGE. I’ve told people over and over that I would not be long it… But it’s that same energy. Retail has the bit between its teeth in lots of ways. They’re not giving up on GameStop, they’re not giving up on Dogecoin right now so dangerous to be short, wouldn’t be long.
Coinbase Effect Lingers And Impacts Bitcoin (BTC)
Bitcoin has been acting as a store of value for the past 12 years, Novogratz said. BTC’s price could move in around $50,000, $55,000, and higher ranges on this level in a consolidation phase. Novogratz expects this could BTC enough momentum to go after a new all-time high.
The high volatility in Bitcoin’s performance is somehow tied to DOGE’s, as the crypto market is still driven by retail investors. Last week during Coinbase (COIN) debut in Nasdaq, many of these investors took leverage positions and were liquidated. Novogratz said:
Leverage got excessive; people got excited. We saw on Friday night there were a couple stories and we wipe out one million separate accounts of leverage buyers of crypto that got taken out. They got shut down and that took about 8-9 billion of market cap out of the system. In the long run, that’s a good thing (…).
Bitcoin is trading at $49.142,06 with a 9.5% loss in the daily chart. In the weekly and monthly chart, BTC is down 21.7% and 9.3%, respectively.