"It's Going A Lot, Lot Higher": Novogratz Sees Bitcoin "Easily" Reaching $40,000 Next Year, Ethereum Tripling

 "It's going a lot, lot higher"

       - Mike Novogratz on the price of bitcoin, Nov. 27, 2017

On October 10, pioneering cryptocurrency investor Mike Novogratz told CNBC that he expects bitcoin will top $10,000 in the next six to ten months; on that day Bitcoin was trading around $4,870. A little over a month later Novogratz got a nice birthday present: on Sunday, with Bitcoin trading just shy of $10,000, the former Fortress hedge fund manager's bitcoin price target was reached in just a few short weeks, prompting the following tweet: "#bitcoin over 9k and #ETH over 460 is a pretty nice way to wake up on my birthday."

Bitcoin's remarkable, exponential surge only accelerated after a mid-November plunge of more than 20% when Novogratz bought $15 million to $20 million worth of the digital currency, in the process acting as the first quasi-central bank price stabilizing agent. Since then, Bitcoin has only shot ever higher, and reached an all-time high of $9,800 on Monday (and trading above $10,000 on South Korean exchanges) at which point it was up more than 10x for the year and about 50% higher for November.

And, if Novogratz is right - again - it has a long way to go.

Speaking to CNBC's Fast Money, Novogratz raised his price target aggressively, and predicted that bitcoin could quadruple in price by the end of 2018.

"Bitcoin could be at $40,000 at the end of 2018. It easily could," Novogratz said. As for "Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well."

Novo's comments came as the market capitalization of all digital coins on CoinMarketCap hit a record $304 billion Monday, although that too could be just the start: Novogratz said he expects that could increase by about six times to $2 trillion at the end of next year.

"There's a big wave of money coming, not just here but all around the world," said Novogratz who plans to launch a $500 million digital assets fund through his new firm, Galaxy Investment Partners. He's right about the influx of funds: demand from Asia, or almost exclusively Japan and South Korea since China halted all exchange-based crypto trading, has been the biggest contributor to bitcoin's gains. Japanese yen trading in bitcoin - seen by many as an offshore proxy for Chinese buyers - dominates trading volume at about 62%, according to CryptoCompare. U.S. dollar-bitcoin trading accounts for about 21%, while trading in South Korean won accounts for about 9%.

While Novogratz' bullishness is hardly surprising - he is after all talking his book - he did make a good point: no matter how great the demand, the supply of cryptos remains fixed.

"What's different about these coins than other commodities ... there is no supply response here," Novogratz said. "So it's a speculator's dream in that as buying happens there's no new supply response that comes up. So every price move gets exaggerated. It's going to get exaggerated on the way up. There will be 50 percent corrections. It will get exaggerated on the way down."

That mush is true: as we showed last week, bitcoin crashes roughly once per quarter suffering a dramatic double-digit decline, although as some have pointed out, in recent quarters the crashes have become more modest. More importantly, so far every dip has been furiously bought.

Novogratz also said that in contrast to oil and renewable energy products, companies cannot produce more bitcoin in order to meet demand since the digital currency's supply is limited to 21 million coins.

And speaking of talking his book, Novogratz is certainly putting his money where his mouth is: he told CNBC that "probably over 20%" or "maybe even 30%" of his net worth is in cryptocurrencies, split roughly in half between bitcoin and ethereum. That allocation is not for everyone, however, and Novogratz doesn't recommend retail investors put any more than 1 to 3% of their net worth in cryptocurrencies, or wealthier investors to put more than 5 to 10%.

Novogratz is not the only one to revise his price target as bitcoin shoots higher: last Wednesday, Fundstrat's Tom Lee raised his mid-2018 price target for bitcoin to $11,500 from $6,000. That followed a similar upgrade last Monday by Standpoint Research's Ronnie Moas, who raised his 2018 price target for bitcoin to $14,000 from $11,000.

Following Novogratz' comments, Bitcoin was trading at $9,780 late on Monday, its all time high. 

On monday, Ethereum hit a record high of $493.40 Monday, and was last trading at $478. If Novogratz is right, its price will be around $1,500 in roughly one year's time.


tmosley I_rikey_lice Mon, 11/27/2017 - 20:33 Permalink

Mt. Gox Redux.People not only need to beware Bitfinex, but also any other exchange that deals in Tether. They might be dependent on them.Also, if the Bitcoin price falls significantly and stays down for any extended period vs BCH, the network will freeze up again. Lots of people may wind up being stuck with coins on a dead chain. BTC owners really REALLY need to hedge with BCH and/or take dollar profits and move them off of any exchange so they can buy back in after the mess is cleaned up.

In reply to by I_rikey_lice

Mango327 overbet Mon, 11/27/2017 - 21:21 Permalink

BTC to infinity as Fiat inevitably inflates away and BTC becomes digital gold. BCH to zero b/c it's a pump & dump supported mainly by an alliance of scammers. Ethereum to $1000 and then $100 as people realize it can't keep up and Vitalik doesn't have a clue. EOS and Dan Larimer eats his lunch and Internet 2.0 (Blockchain everything) is reality by 2020. BITCOIN, A.I., & NET NEUTRALITYhttps://youtu.be/SRLc4G6lJMw

In reply to by overbet

decon overbet Mon, 11/27/2017 - 23:07 Permalink

"...he did make a good point: no matter how great the demand, the supply of cryptos remains fixed."That is fundementally not correct.  Sure, on an individual basis the quantity of a crypto is constrained by the math, but in the aggregate there is no limit to the crypto supply as an unlimited number of different types can be created.  This is the doubt I have with the concept of distributed ledger currency.  They have lots of characteristics that make them attractive and utilitarian but that unlimited dilution in aggregate worries me.

In reply to by overbet

BarkingCat blentus Tue, 11/28/2017 - 09:20 Permalink

You do not understand human behavior. When an item gets too expensive people search for alternative. There already other digital "currencies". (although digital tokens is more accurate as these are not currencies).Bitcoin has a head start but does not mean it will win the race amongst them. Myspace had a head start on the Facebook.

In reply to by blentus

tmosley I_rikey_lice Mon, 11/27/2017 - 20:45 Permalink

It's a huge problem. I think everyone has seen the shill brigade bombarding anyone and everyone questioning Core with personal attacks. I don't think everyone has noticed that this is the exact same tactic that has been employed against the "alt-right" and the "Bernie Bros" who failed to get in line under Shillary. Neoliberal propogandists who are taking their cues from cognitive scientists in order to create a situation where Core either wins, or there is a split in the community that NEVER heals after it fails/BCH wins.You can't have a store of value that doesn't have some sort of use. If you try, you get "trading sardines" that will collapse in price once people realize there is nothing to them. The ability to buy and sell goods outside the dollar system, more cheaply than you could transact with Visa, etc, gave BTC a raison d'etre. Now that Core proponents themselves are telling people to transact using other coins, it's all over but the crying.Will be interesting to see what happens to LTC as this progresses.

In reply to by I_rikey_lice

MonetaryApostate tmosley Tue, 11/28/2017 - 07:11 Permalink

Ok, so you had to go there did ya?Let me appeal to your superior intellect like this then...If the banks resorted to hyper QE to support the stocks, bonds, & treasurie markets, who's to say the aren't using phoney money to pump cryptos?We've already seen collusion & corruption in the banking sector abroad, but we've also have seen them getting into crypto too, in fact the British Kleptocrats were pumping and advertising cryptos long before they started rising massively.  Just watch any of the Max Keiser shows about cryptos to see just how much the British are in on this.Therefore, if hedge funds & blank check bankers are pumping the market, wouldn't it be indicative to foxes luring the chickens in for dinner?Think about YouTube & after the monetization of it, the wealthy alwa ys lure you in with free or cheap fir now scams, & surely they made deep long term plans for cryptos after they took control over them.Nevertheless, Cryptos are at best a speculative investment with far too much volatility & just because they say this is the way it is, doesn't mean the banking kleptocrats can't change everything tomorrow.https://plus.google.com/collection/QorNbB

In reply to by tmosley

MonetaryApostate tmosley Tue, 11/28/2017 - 08:52 Permalink

Well, if that's what you are looking for, then let me explain it simply.Cashless societies means...A) You'll be forced to pay transaction fees (High)B) The gov has an open accounting book on you.C) You will only be permitted to spend/use it in approved ways.(eg capital controls)So, you see, in short, cryptos are the beginning of the end of cash, & it only takes one piece of legislation to force it through, or a massive collapse, but if everyone buys into crypto, tell me then wise sage, what will that mean?

In reply to by tmosley

HillaryOdor Mango327 Mon, 11/27/2017 - 22:57 Permalink

This is exactly the problem, one of the big ones at least.  There are already better coins than BTC and better ways to secure the network.  Bitcoin is just surging off of PR and name recognition at this point.  It's the one everybody has heard of.  And new coins can always come out that keep getting better and better.  What are we supposed to have a new global currency every 6 months?  Better switch over or lose all your wealth.  Or is everyone just gonna stick with the old shitty currency because it came out first?  It's a pipe dream spawned out of the festering abcess of yet another state failure.  There's so much misallocated captial here and everywhere else.  When the everything bubble pops it's gonna be glorious.  If we were still using honest money none of this would have even happened. 

In reply to by Mango327

Mango327 HillaryOdor Tue, 11/28/2017 - 02:24 Permalink

Maybe I'm just a young dude but the idea of stepping from one boat to the next really doesn't stress me out that much. BTC has had and will continue to have a solid value proposition as slow-payment, store of value, digital gold. Dash et al can serve as digital cash, which ye exchange some 'gold' aka BTC for as needed. ETH (soon will be EOS) is the Blockchain applied to every other aspect of civilization, the second coming of the Internet. Saddle up, ya nancies. This train is bound for fucking VALHALLA. Cheers, brothers!

In reply to by HillaryOdor

HillaryOdor Mango327 Tue, 11/28/2017 - 08:53 Permalink

Well maybe step outside your own bubble for a minute and think about the average person who can barely even figure out how to use a computer.  Hell most people still use garbage point and click OS to get around and do everything on a computer.  That's why absolute crap like Windows and MacOS are still the most popular.  They're scared of a keyboard and a command line for Christ's sake.  You think these people are going to sit and research currencies all day?  Compile wallets from source?  You think they're going to properly secure their wealth?  Forget about it.  And if everyone starts relying on hardware wallets then that's going to stall them from switching over to new currencies, so the non tech-savvy people are going to be royally fucked every time this happens.  It's not going to happen.  People don't want to treat their currency like some kind of tradable commodity where they have to watch the markets every day to make sure they aren't losing value.  If they did then everyone would be in the forex markets.

In reply to by Mango327

MonetaryApostate Mango327 Tue, 11/28/2017 - 07:15 Permalink

The real hole in the bathtub (Think crypto money pool) is transaction fees, which are subject to not just change, but can reach extortion levels, eg 1-3%, like how credit card reader corps charge, & eventually all money put into crypto will be sucked out through the transaction fee hole, not to mention that what goes up, must come down!

In reply to by Mango327

affirmed_78 QueeroHedge Tue, 11/28/2017 - 10:07 Permalink

Exactly - and I don't even get the implications.  Is there some law that tether $ must flow into BTC?  Everyone knows crypto is the wild west, and while tether may fail, I see no reason why it would affect supply and demand for BTC, or any other crytpo for that matter. In a way, it's sort of like all the alts and forks - if you can sell them for BTC, why not?  As long as people are dumb enough to buy that garbage, it's their issue.  Over time I expect they'll learn their lesson.

In reply to by QueeroHedge

Crazy Or Not tmosley Mon, 11/27/2017 - 21:42 Permalink

Google is currently testing a 20 Qubit quantum computer, and expect to release by end of year.D-Wave is already in use in places like Harvard.Quantum 4quad's processors make BTC very hackable. I see a finite timeline.Aside from this BTC does not exist in a vacuum. The shift to petroyuan & petrorouble and possible adverse effects to dollar means safe havens are highly attractive right now. Same may not be true in 1, 2 or 3 months. We have to face the possibility we're looking at a December peak. Anyone whose in wants to drive the infinite growth narrative. Beyond that some points:- The fee *per transaction* is currently about 20 dollars.2. There's 115k unconfirmed transactions awaiting processing3. Bitcoin can handle, at most, 4 transactions per second (Visa manages 40,000 per second, at a fraction of the power usage).4. it is estimated that near 50% of both coinbase and bitfinex are nothing but wash trading by a group or individual nicknamed "Snoopy" who does so to both manipulate the price and abuse the resulting arbitage between the two exchanges to generate revenue.5. Bitfinex didn't totally just generate 30 million in "tether" to cover their lack of USD reserves when people tried to cash out their bitcoin, right? I could go on about how difficult it is to use in day to day situations, but I really sholdn't need to.

In reply to by tmosley

kochevnik Crazy Or Not Mon, 11/27/2017 - 22:14 Permalink

Well one problem QM is bullshiyte corpuscular, materialism theory completely failing match input with output.  There is correlation of particles but it is only amazing because timespace are thought as fundamental, when they are shadow.  Coherence is real.  Dwave is not even true QM but aggrandized stimulated annealing similar to cooling molten steel

In reply to by Crazy Or Not