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Novogratz’s Buying Bitcoin After ‘Volaciraptor’ Ravaged Markets

Bloomberg logoBloomberg 3/24/2020 Vildana Hajric

(Bloomberg) -- Billionaire investor Mike Novogratz is using the recent Bitcoin slump as a buying opportunity.

Bitcoin got “terrorized” during the latest bout of volatility that Novogratz dubbed “the volaciraptor,” a play on the name of the destructive dinosaurs associated with the Jurassic Park movies. The largest digital currency dropped from about $8,500 at the beginning of March to as low as $3,914 mid-month.

“If there was ever a time -- debasement of fiat currencies, monetization of trillions of dollars of debt, this is the time for Bitcoin,” the chief executive officer of Galaxy Digital Holdings Ltd. said in a television interview with CNBC, adding that he might continue to buy dips in gold and Bitcoin today.

Bitcoin has lost more than 20% this month © Bloomberg Bitcoin has lost more than 20% this month

Novogratz has been bullish on the digital token for years, predicting on Tuesday that it will rally this year. It was designed to be an alternative when central banks have “run amok,” he said. Global central banks have taken unprecedented steps in recent weeks to shore up economies as the spreading coronavirus dents growth.

“It needs to rally this year,” he said. “If at the end of the year Bitcoin’s not a lot higher, I’m going to scratch my head and say, ‘Look, what the heck is going on?”’

That’s comforting comments for crypto evangelists who watched Bitcoin lose more than 20% of its value this month, falling in tandem with equities in one of the darkest stretches for financial markets in decades. Theories that cryptocurrencies act as a place of shelter during turmoil diminished during that time, with many analysts now arguing the token can’t be referred to as a safe-haven.

Bitcoin, U.S. stock futures moving in concern with one another © Bloomberg Bitcoin, U.S. stock futures moving in concern with one another

“It could be very likely that traditional investors are seeking to regain liquidity though profit hunting from crypto assets as equities are negative worldwide,” said Christel Quek, chief commercial officer and co-founder at Bolt Global.

Bitcoin rose 2.2% as of 11:31 a.m. in New York Tuesday to trade around $6,556. Peer coins, including Litecoin and XRP also gained.

At least one technical indicator -- which many analysts rely on in the crypto world due to lack of fundamentals -- is showing promising signs. With Bitcoin hovering above $6,000 this week, the GTI VERA Convergence Divergence Indicator, which measures up and down shifts, flashed a buy signal.

GTI Vera Convergence-Divergence indicator flashes Bitcoin buy signal © Bloomberg GTI Vera Convergence-Divergence indicator flashes Bitcoin buy signal

Bitcoin exhibited a similar pattern recently when it lost about $3,500 between October and November. It then rocketed to $10,400 in early February.

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©2020 Bloomberg L.P.

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