Former Hedge Fund Manager Sees Institutional Crypto Investments to Flourish

Jun 08, 2018 at 23:02

Michael Novogratz, a well-known former partner at Goldman Sachs and also a former hedge fund manager at Fortress Investment Group has boldly stated that institutional investments will flood the crypto industry.

“You have this sense of nervousness around fiat currencies, a sense of distrust against central banks and quite frankly financial institutions. In 2008, we thought JP Morgan was going out of business as Lehman would go out of business so it felt like an easy play that there is a new technology and there is a story that we could have a distributed trust,” he expressed during the Bloomberg Invest conference in New York.

The official who is now serving as the CEO of Galaxy Investment Partners, a cryptocurrency investment firm added that the crypto industry’s rising popularity can be traced with Bitcoin’s trailblazing distributed trust ledger capability as well as the utilization of digital tokens as an incentive mechanism to create a social network of people.

He noted that such capability allowed a lot of new business models but admitted that there are still so much to learn about the intricacies of the crypto industry as it is still fairly new.

“At first, I bought it for the money, I bought it at $96 a Bitcoin and went up to a thousand dollar pretty quick and that was pretty cool. It took a little while for me to dig in and really understand why it is gonna be a lot bigger than a speculative asset,” Novogratz further stated.

It can be recalled that he is keen on turning Galaxy Investment as an institutional-quality merchant banking business for cryptocurrency and blockchain especially in the aspects of trading, principal investing, asset management and advisory work.

“We have institutions that are marching slowly but surely towards acceptance. Markets always get way ahead of reality and that is just the way it works. This is such a powerful story and some of these potential disruptors are so powerful in such big industries that my gut feel is institutional money is coming soon and markets are gonna get way ahead of the reality again,” Novogratz claimed.

He also claimed that wider acceptance of digital currencies may take time but cited potential for digital tokens to disrupt big technology companies soon like Uber through decentralization. The official also proclaimed that while a lot of blockchain solutions are being created, many of them will also fail to proliferate.

It can be recalled that his company recently partnered with Bloomberg for the Bloomberg Galaxy Crypto Index which is capable of tracking the performance of the largest cryptocurrencies.