Home / Markets / Cryptocurrency /  Billionaire Mike Novogratz says Bitcoin can still reach $500,000 in next 5 years

Billionaire investor Mike Novogratz, who once called himself the ‘Forrest Gump of Bitcoin,’ said the recent turbulence in the cryptocurrency industry is a full-fledged credit crisis and has predicted that Bitcoin will eventually reach $500,000 in the next five years or so.

“What I don’t think people expected was the magnitude of losses that would show up in professional institutions’ balance sheets and that caused the daisy chain of events," Novogratz said at the Bloomberg Crypto Summit on Tuesday. “It turned into a full fledged credit crisis with complete liquidation and huge damage on confidence in the space."

Bitcoin has struggled to escape a $19,000 to $22,000 range as investors lick their wounds from a rout sparked by tightening monetary policy and exacerbated by the toppling of Celsius and the TerraUSD stablecoin in May. It has retreated from a record high of almost $69,000 in November. Some enthusiasts are forecasting that Bitcoin will recoup this year’s losses once the Fed’s tightening cycle is done. The overall market value of digital tokens has retaken the $1 trillion level.

The founder of Galaxy Digital Holdings Ltd., who was a big promoter of Terraform Labs, the company behind Terra and Luna, said the lesson learned from the collapse of the stablecoin was that both the industry and retail investors really had very, very little concept of risk management.

TerraUSD, or UST, lost its peg to the dollar in May and, along with its digital coin counterpart Luna, saw almost all of its value disappear. It sparked what is being called a “crypto winter," with Celsius and Babel, as well as hedge fund Three Arrows Capital, dragging down the industry. 

The cryptocurrency market failed to recover from Terra’s collapse in May as insolvency threats loomed large over major crypto lending companies, spreading fear among market participants.

“I don’t know what the SEC should have done, or could have done or might have done, but they didn’t do a lot to protect the retail investors," Novogratz said. He said the “worst is over" in the crypto industry and that while the current issues may have increased distrust among retail investors the argument for Bitcoin is still strong, particularly as central banks around the world fight inflation.

(With inputs from Bloomberg)

 

 

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