According to Galaxy Digital’s CEO, institutions are buying massive amounts of Bitcoin and this is pushing the price upwards
Mike Novogratz, founder and CEO of Galaxy Digital, believes that institutional investors are helping to support Bitcoin’s current bull run.
In an interview yesterday with BBC World, Novogratz explained that money printing and „fiat money devaluation“ by governments around the world is fuelling Bitcoin’s (BTC) ongoing bull run, but the arrival of institutional players in the crypto sector could Bitcoin Bank be the most important development. According to Galaxy Digital’s CEO, over the past three years large corporations have changed their minds about crypto, potentially influencing the available supply of coins.
„We now see services like PayPal, with 340 million customers, offering and selling Bitcoin, along with large insurance companies in the US,“ Novogratz added. „With institutions coming in, the supply is not much… millionaires in the industry are much more than 21 million.“
Macro investor Raoul Pal echoed Novogratz’s bullish sentiment, saying he believes that if this trend continues, Bitcoin „could reach a price between $400,000 and $1.2 million“ by the end of the year. In November, Pal revealed that he had invested 98% of his net liquid assets in BTC and Ether (ETH), but added that he „doesn’t have enough yet.“
Novogratz has also changed his mind about what percentage of the portfolio investors should allocate to Bitcoin. Prior to November, the Galaxy Digital CEO said Bitcoiners should invest up to 3% in BTC to hold for five years. However, last month he advised new investors to invest 5% in BTC, as „Bitcoin will not go back to zero.“
In 2020, many large institutions entered the crypto sector for the first time. Business intelligence firm MicroStrategy announced the purchase of $425 million in BTC, an investment now worth more than $1.2 billion; it later added $650 million in BTC to its reserves. In December, US insurance company MassMutual bought $100m in BTC for its general investment account.
At the time of writing, the price of Bitcoin is $31,908, having set a new all-time high at $34,800 on 3 January.