Mike Novogratz Shares Insights on Cryptocurrencies BlackRock, Worldcoin, and Ripple

Mike Novogratz remains optimistic about Bitcoin’s resurgence, attributing his bullish stance to the influence of a specific individual amidst a tumultuous year of scandals and financial setbacks in the cryptocurrency industry.

“The most important thing that happened this year in Bitcoin is Larry Fink,” Novogratz said, referring to the investment titan who is CEO of BlackRock Inc., the world’s largest asset manager.

BlackRock got the crypto community excited in June when it applied to set up an exchange-traded fund to track the spot price of Bitcoin — a move that, if approved, could potentially spark a new wave of investment in the cryptocurrency. But Fink’s apparent conversion from crypto-skeptic to Bitcoin believer — he now considers it an “international asset” — has Novogratz really excited.

“He got the ‘orange pill,’ as we say. The orange pill is when you take a non-believer and make them believe in Bitcoin,” Galaxy Digital Holdings CEO Novogratz told David Rubenstein this week in an interview for an upcoming episode of Bloomberg Wealth. “Larry was a non-believer. Now he’s saying, ‘Hey, this is going to be a global currency.’ People all over the world trust it.”

BlackRock’s ETF push and Fink’s evolving stance are part of an “embrace cycle” that Novogratz said could help push the coin to an all-time high of nearly $69,000 reached in 2021 — especially with the Federal Reserve’s possible turn toward lower interest rates. This week, Bitcoin hovered between $29,000 and $30,000 after gaining more than 70% year to date.

Novogratz also said in a wide-ranging conversation at the Galaxy’s offices in lower Manhattan. The Securities and Exchange Commission’s recent decision in the case against Ripple Labs represents a “huge victory” for crypto and addressed the issues of Sam Altman’s eyeball scan. Worldcoin project for Galaxy’s commitment to remain present in New York.

One of Wall Street’s most vocal crypto advocates, Novogratz, a former partner at Goldman Sachs Group Inc. and Fortress Investment Group, first bought Bitcoin when it was trading at around $100. In 2018, he founded Galaxy Digital, which provides financial services such as trading, investment banking and asset management in the crypto industry.

Novogratz’s reputation took a hit last year when a crypto project he backed, the Luna token invented by South Korean entrepreneur Do Kwon as part of an algorithmic stablecoin experiment, imploded and caused a series of collapses in the industry. The now-infamous tattoo on his arm — a wolf howling at the moon with the word “Luna” — serves as “a good reminder of the swagger,” Novogratz said.

AI Hype

His advice today to someone with $100,000 to invest: “If they were young and had a high risk tolerance, I would buy Alibaba shares. I would buy silver, gold, Bitcoin and Ethereum. That would be my portfolio.” Those with a lower risk tolerance should invest 30 percent in such a portfolio and 70 percent in bonds and maybe an index fund, he said.

Asked if Worldcoin would take off, Novogratz replied that “you don’t want to bet against Sam Altman right now.” (Altman, a Worldcoin co-founder, is also the AI sensation behind ChatGPT.) Worldcoin uses a small device called a “ball” to scan people’s eyeballs to create a unique digital identity for online use. The token issued by the project more than doubled in value at launch this week before retreating from those highs. It was trading at $2.20 as of 6:30 p.m. on Friday in New York.

“I think the price can go much higher because of the AI hype,” Novogratz said. “I don’t know if we use that as our identity.”

This year’s explosion of enforcement actions by the SEC against major crypto companies has shocked many in the industry. Novogratz said the recent court ruling in the SEC’s lawsuit against Ripple — the judge declared that Ripple’s XRP token was a security in some cases, but not in others — was a win for the crypto industry because it proves that “the rules are nowhere near clear.”

As for Galaxy itself, while it is moving parts of its business offshore, it remains committed to New York. “I don’t see us being in the United States or New York,” Novogratz said.

For the full interview with Novogratz, tune in to Bloomberg Wealth with David Rubenstein on Tuesday, August 8 at 9pm NY time on Bloomberg TV.