One of the most important hedge fund managers and billionaire investor, Michael Novogratz, said that the investigation that is being carried out by the U.S. Department of Justice (DOJ) is a ‘good thing’ for the cryptocurrency market.
Novogratz Supports DOJ’s Bitcoin Manipulation Probe
It is important to understand that the U.S. Department of Justice decided to open an investigation that will analyse whether crypto traders have been manipulating the price of Bitcoin or not.
During an interview with Bloomberg, Mr. Novogratz, founder of the crypto bank Galaxy Digital, explained:
“Weeding out the bad actors is a good thing, not a bad thing for the health of the market. Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins.”
During the last year, several virtual currencies have been marked as manipulated after being pumped & and dumped in different periods of time. There are hundreds of pump & dump groups that modify the normal market trend of some low-volume cryptocurrencies.
As the virtual currency market is highly unregulated, these situations may continue to happen in the future in various exchanges if regulations are not implemented.
Cameron Winklevoss and Thomas Lee Agree With Novogratz
There are other figures in the cryptocurrency world that have also supported Mike Novogratz’s comments about DOJ’s decision to investigate virtual currencies. Cameron Winklevoss, co-founder of the cryptocurrency exchange Gemini, said that these regulations are welcomed by the market if they help deter bad actors.
Most of the cryptocurrency-related companies are searching for regulations that would bring legitimacy to the market. A field without regulation and with an important number of scams may not be able to prosper and grow. Investors will not have the necessary confidence to place their money in the game. And this is certainly not what cryptocurrency believers want.
In a similar way, Thomas Lee, co-founder of Fundstrat Global Advisors, wrote in an email to Bloomberg that these regulations are welcome news because they mean that there is ‘adult supervision coming/here.’
Tom Lee has predicted that Bitcoin will reach $25,000 dollars by the end of the year, even when the most important currency lost 25% of its price since the first week of May. Additionally, he explained that after the Consensus conference the price of Bitcoin should increase – something that did not happen until now.
At the moment of writing this article, Bitcoin (BTC) is being traded over $7,500 dollars and has registered an increase in the last 24 hours of 0.67%, according to CoinMarketCap. Other virtual currencies like Ether (ETH), Ripple (XRP), and Litecoin (LTC), are operating positively as well.
The virtual currency market needs regulations that will allow it to properly grow. It is important to have a framework that would let innovation to flourish but protecting investors from scammers and illicit activities. Institutional investors are slowly entering the market, and as soon as there will be more friendly regulations, the results will be even better.