The fact that Bitcoin is backed by over 150 million people around the world means it has intrinsic value according to the Billionaire CEO of Galaxy Investment Partners Mike Novogratz.
He expelled fears of a massive Bitcoin sell-off saying in an interview with CNBC that people are buying Bitcoin based on the slow depreciation of the dollar.
“We can get into philosophical debates about what value is – a Matisse painting can run to $100 million because a small number of people decide they’re worth $100 million.”
“Over 150 million people around the world have decided Bitcoin is worth something -that’s enough for me.”
The billionaire, whose firm posted a second-quarter loss of $175.8 million, argued that the crypto market is still being propelled by massive institutional engagement and demand. He is known to be bullish about Bitcoin. However, he is not nervous about its price movement so far, he said.
“I see nothing but engagement and activity from our investing clients and our corporate clients.”
There were fears on Monday and yesterday that Bitcoin and crypto prices were headed for a massive tumble due to the debt crisis at the Chinese Evergrande multinational firm. Since Monday, Bitcoin’s price has fallen by close to $5,000. Yesterday, it was selling at slightly below $42,000 although it has since corrected to the current price of $43,390 as of this writing.
Novogratz denied the reports that Bitcoin was headed for a massive tumble, terming the recent decline in prices as a mere correction of a market that has spent several months on the “up-only” mode.
“I think the market got itself a little too long — the China news scared people,” said Novogratz.
He said the important levels to watch for Bitcoin and Ethereum are $40,000 and $2,800 respectively.
“As long as those hold, I think the market’s in good shape.”
At the same time, he said that if Bitcoin was really a digital gold, it should not be a huge worry or threat to the dollar.
He maintained the correction was also a result of regulatory concerns in the United States. The U.S. Securities and Exchange Commission Chairman Gary Gensler has been issuing regulatory threats and recently said in an interview with The Washington Post he did not see a long-term future for five or six thousand private forms of money or cryptocurrencies.