(Bloomberg) -- Institutional money should start to flow into cryptocurrencies within the next year, setting the stage for a rally, according to Galaxy Digital Holdings Ltd. founder Mike Novogratz.
“All the architecture that institutions need to feel comfortable with this is being put in place,” Novogratz said in an interview on Bloomberg Television. “You're going to start to see custody come online” through the middle of March, paving the way for the “smart money” to enter in a serious fashion.
READ: Mike Novogratz Explains Why He's Still All-In on Crypto (Dec. 11)
Once there are custody solutions from the likes of Fidelity, which Novogratz said has 200 or 300 customers interested in putting money in crypto, institutions could start to enter the digital-asset space. He cautioned that money managers wouldn't all rush in at once, as many would want to see how it goes before committing capital.
“Over the next six to 12 months you are going to see institutions put a small amount of their assets” in digital currencies, according to Novogratz, a former hedge fund manager and Goldman Sachs Group Inc. partner who has been among the most high-profile Wall Streeters to jump into the crypto craze. “A small amount of institutional assets is a lot of money.”
READ: Yale Said to Invest in Crypto Fund That Raised $400 Million (Oct. 5)
That inflow, Novogratz said, will set the stage for a rally. He suggested it could take Bitcoin to $8,000, versus the price of around $3,582 as of 8:30 a.m. in London. The digital asset soared above $19,000 in December 2017 before tumbling precipitously over the next few months. It bottomed at around $3,136 in December 2018.
Novogratz also said the next runup was likely to separate Bitcoin out from a lot of other cryptocurrencies, reiterating that he thinks it's going to become “digital gold.”
Read more:
- On Jan 23: Nasdaq, Citi Join Novogratz in Funding Blockchain Firm Symbiont
- On Jan. 3: Thriving on Bitcoin's Bust, Lenders Both Aid Fans and Shorts
--With assistance from Filipe Pacheco.
To contact the reporters on this story: Manus Cranny in London at mcranny@bloomberg.net;Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Joanna Ossinger, Todd White
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