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US hedge fund manager Mike Novogratz, who is starting a $500 million (R6.9 billion) fund to invest in cryptocurrencies, says the bitcoin rally still has some serious legs.
After surging more than sevenfold since December last year, the largest and most widely known digital currency will end the year at $10 000, he said.
Smaller rival ether will trade at $500 from almost $370 this week.
Bitcoin is like digital gold in that “gold has value solely because people say it has value; bitcoin is built on an amazing technology, there’s a limited supply of it”, Novogratz said.
“This whole revolution came out of a breakdown in trust in the 2008 [global financial] crisis.”
Bitcoin climbed to a record $8 374 this week after Novogratz’s comments.
Many of his former Wall Street colleagues don’t share his enthusiasm. JPMorgan Chase CEO Jamie Dimon has said anyone who buys bitcoin is “stupid” and will pay the price, while Neil Dwane of Allianz Global Investors said it’s a “scam for criminals around the world”. BlackRock CEO Larry Fink said it’s an index to gauge the demand for laundering money around the world.
However, Novogratz has a lot of company. There are now more than 100 cryptocurreny-focused hedge funds, with 84 opening this year, up from 11 last year, according to research by Autonomous Next. – Bloomberg
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