Novogratz revises prediction: $800 Billion market cap in 12 months driven by Crypto-custody practices
Galaxy Digital founder, Mike Novogratz revised the timeline of cryptocurrencies achieving $800 billion market cap by the end of this year by over six months. The digital assets advocate had earlier predicted that the market capitalization would be achieved by the year-end. However, upon deeper examination, he believes it will take long for such value of market capitalization to be realized.
Novogratz believes that prices of cryptocurrencies, especially bitcoin have reached a flat level. The only movement from this point will be the upward movement the digital guru asserts.
He adds that much of the acceleration will happen only in the long term as and when governments have standard policies and regulations for the propelling the cryptocurrencies forward.
Adoption level increases gradually
His optimism for potential growth is based on the fact that there is an increase in the level of adoption of the cryptocurrency in key markets and in the secondary markets as well. The process of adoption is however gradual, he cites. There has been a marked increase in the number of people who want to learn and practice cryptocurrency use in their businesses. The attendees at crypto conferences are also on the rise, indicating further adoption curve. On the industry front, the number of private institutions which are making a marked switch to digital currency format has also increased considerably by seeking venture capital funds.
However, for all of these parallel developments to become cohesive there one major component will have to be standardized across markets, and that is the introduction of crypto-custody frameworks and institutions.
The master crypto manager suggests that once there is a clear line of institutional players who will act the role of custodians of virtual currencies, institutional investors will begin to take this industry more seriously.
Thus far the rules of cryptocurrencies have been negatively biased as they are seen as the new market forces which will eliminate the need for third-party ledger keepers. Additionally, there is a neo-liberal political philosophy attached to the use of digital currencies as they are viewed as anti-establishment trading instruments which will supersede the government’s policies. Thirdly, virtual coins and other assets are shrouded in anonymity which is not easily understood by the common investor or digital currency user. The result of all of these issues is that institutional investors with large capital have largely remained outside of the cryptocurrency investment environment.
Custodian practices can bridge the gap
Novogratz believes that by the introduction of ‘custodian practices,’ this gap can be bridged and the large FIIs will make a beeline to investing in virtual currencies and the ecosystem.
He adds that FIIs are always exploring new avenues of high profit making in the minimum risk environment. Eventually, such FIIs typically handling pension funds will explore cryptocurrencies and digital investment opportunities.
When the tipping point does arrive, the mature processes will gather momentum and the transition to the market capitalization of $800 billion in the next 12 months should not be impossible, the expert predicts. The revision of the timeline by which this capitalization is achieved will be a crucial factor for most common investors.