Key Takeaways
- Mike Novogratz predicted that the global cryptocurrency market could eventually reach $20 trillion.
- He argued that crypto’s international reach gave it a broader investor base than the 1990s internet boom.
- His forecast depended on institutional participation, with pension funds expected to follow the first major buyers.
Mike Novogratz predicted that the global cryptocurrency market could reach $20 trillion, with institutional investors driving the next phase of growth.
Speaking at the Bloomberg Invest Summit in June 2018, the former Goldman Sachs and Fortress trader argued that the market still had room to expand after the price surge of late 2017 and early 2018. He expected wider adoption despite the downturn that followed.
Novogratz Compares Crypto With the Dot-Com Boom
Novogratz argued that cryptocurrency attracted a broader international audience than the 1990s internet boom. He described that earlier boom as concentrated among wealthy US investors.
He pointed to buyers in Bangladesh and trading activity in Japan, South Korea, China, India, and Russia. Furthermore, he believed that participation across these markets could support further growth.
“We’ve got a global market and a global mania. This will feel like a bubble when we’re at $20 trillion.”
A Target More Than 20 Times the Previous Peak
The market peak cited at the time was approximately $900 billion. Reaching $20 trillion would have meant growing to more than 20 times that size.
Novogratz expected the market to recover from the downturn extending into mid-2018. He also cautioned that reaching his target would take time.
Institutional Buyers Would Drive the Next Phase
Retail investors had driven much of the market’s growth, in Novogratz’s view. He expected pension funds and other institutional buyers to lead the next phase.
His explanation centered on what would give a pension fund confidence to invest. He described a buyer reassured by custody arrangements, Goldman Sachs’ involvement and a Bloomberg Galaxy Crypto index that could serve as a performance benchmark.
Novogratz Expects FOMO to Spread to Institutions
Once one leading pension fund invested, Novogratz expected others to follow. He anticipated that institutional buyers would show the same fear of missing out that had influenced retail investors.
“The same FOMO [fear of missing out] that you saw in retail [will be] demonstrated by institutional investors.”
