Mike Novogratz, one of the most influential investors and analysts in crypto verse, spoke this week about the future of cryptocurrencies, their global adoption, and the coming blockchain revolution.
For the CEO of Galaxy Digital Capital Management, businesses related to the use of cryptocurrency and investments in blockchain technologies have evolved considerably in recent years.
The most important aspect that has allowed a significant development of these technologies has been the high level of enthusiasm that this revolution has sparked in younger people eager to start new businesses:
“[When I founded Galaxy Digital Capital] The mission was to convert institutional investors to crypto, Now, when I meet a CEO or CIO, I am surprised at how much they know. Most have not taken the first step in participating, but they are doing a lot of work.”
Currently, Mr. Novogratz’s firm does not only operate in North America. He is also opening offices in Hong Kong and Tokyo to expand his operations to Asian markets.
He also commented that one of the significant differences between the traditional markets and the crypto markets is the high level of volatility they entail. For Novogratz, crypto traders are very comfortable in this type of extreme-risk markets:
“If you bought crypto three months ago, now it [has dropped] 50% and you look like a joke, but in venture capital, nobody expects profits for years,” Novogratz said. While many investments promise returns of 7% a year, “in crypto, not many people want to buy at 10-12%.”
For Novogratz, the global adoption of cryptocurrencies is a possible dream, but there is still a long way to go. The main problem is fundamentally the need for education on what cryptocurrencies genuinely are and their various use cases.
For this reason, according to his perception, it is difficult to think of a global adoption in the short term:
“You won’t see mass adoption until the user experience does not feel like something new and that is still five to six years away.”
In the same vein, he commented that before a global adoption, there would first be a wave of strong institutional investments that would legitimize cryptocurrency as a valid means of transmitting wealth.
“The bet I am making is that sometime in the next two to three years, a herd of institutions will come running into this space. Without that, we will be running in circles.”