A Top Hedge Fund Manager Says Bitcoin Could ‘Easily’ Hit $40,000 by the End of 2018
Bitcoin was hovering just $ 300 shy of the vaunted $ 10,000 mark at one point on Monday but it could “easily” reach four times that amount by the end of 2018. That’s according to former Fortress hedge fund manager Michael Novogratz.
“Bitcoin could be at $ 40,000 at the end of 2018. It easily could,” Novogratz said on the CNBC show Fast Money, Monday. “Ethereum, which I think just touched $ 500 or is getting close, could be triple where it is as well,” he added.
Ethereum, the second largest publicly traded cryptocurrency by market cap, hit a record high of $ 493.40 Monday, according to CoinMarketCap.
Novogratz attributed the cryptocurrency sector’s rambunctious growth prospects to an influx of new money, particularly from Asian investors, and to cryptocurrencies’ finite amount of units: 21 million coins in the case of Bitcoin. This means that in contrast to commodities like oil or agricultural products, producers can’t choke or expand supply in response to market fluctuations.
“What’s different about these coins than other commodities … there is no supply response here,” Novogratz told CNBC. “It’s a speculator’s dream in that as buying happens there’s no new supply response that comes up. So every price move gets exaggerated.”
Read more: Bitcoin Is Getting Really Close To $ 10,000. Here’s What Analysts Are Saying.
Novogratz told CNBC that although he has more than 20% of his net worth vested in cryptocurrencies, he does not recommend others adopt such a fulsome strategy. Between 1% to 3% of net worth would be an appropriate figure for retail investors, Novogratz suggested; wealthier investors he recommends, could commit about 5% to 10% of their net worth.
