Bitcoin and Ethereum may have faced extended periods of uncertainty in 2020. From the breathtaking rally in January-February 2020 to the unforeseen collapse in March 2020, and now, on the cusp of triggering a bull run, the top two assets were faced with significant curveballs thrown in their direction.
With major proponents within the industry and outside professionals such as Paul Tudor Jones supporting Bitcoin and other altcoins, Mike Novogratz stated that 2020 could possibly be the most important years for digital assets.
Speaking to Bloomberg, the Galaxy Digital Holdings Founder and CEO stated that the crypto ecosystem has benefited immensely in the current economic landscape with a perception of fixed zero interest rates, while the central banks have been trying to jam liquidity in the market. With a positive sentiment settling in, both Bitcoin and Ethereum have been to register stellar performances from a price perspective.
Additionally, Novogratz added about the speculative trading of DeFi and admitted he had never seen such liquidity pumping in such speculative projects but drew similarities to the prospect of Tesla in early 2019. Calling it a ‘speculative frenzy’, he believed it was still early days in DeFi and the astronomical growth did worry him a little bit.
With respect to the new coins and DeFI coming up and incurring interest from the rest of the market, Novogratz stated that it was a little reminiscent of the 2017 bubble when ICOs were attracting new investors and liquidity frenzy was taking place. However, he said,
“I think DeFi is going to be around longer. They are building infrastructure but we are in a sandbox that is getting filled with liquidity at the moment, and traders have to be very careful.”
Bitcoin prices are up due to Institutional Buyers
With regards to Bitcoin, Novogratz stated that the BTC’s price has been higher due to the institutional buyers who have a high net worth, hence they have been able to consolidate higher up in the charts. These buyers are coming in ‘methodically’ and accumulating while foreseeing profits in the long-term, unlike Ethereum where DeFi enthusiasts are flooding in for a possible short-term gain.
Finally, Novogratz concluded that digital assets like Bitcoin, Ethereum are definitely not going away after the year they had in 2020. Bitcoin as a store-of-value might be a ‘finished product’ according to the Galaxy Digital CEO but he prediction further innovation with other digital asset projects.