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Mike Novogratz believes that the Bitcoin market is still in its consolidation phase after last month’s correction. The Galaxy Digital Founder and CEO said that the market is waiting for a new catalyst, such as SEC’s approval of a BTC ETF, to bring in a new wave of money.
Novogratz explained that the Bitcoin market is currently in a period of consolidation. This came after BTC’s price soared to $60,000 from just around $9,000 a year earlier, which prompted profit-taking from some investors.
“The urge to ring the cash register is such a deep-seated human urge, that that's what happens,” Novogratz told Yahoo Finance's Zack Guzman at the 2021 Bitcoin Conference. “People made a lot of money in something. They sell some. They sell some to buy a house, to buy their girlfriend a ring, to diversify their portfolio so they're not 90% Bitcoin, right?”
This brought the current consolidation phase of the Bitcoin market. The market is expected to rally once a new catalyst is introduced.
“And so we see these kind of step function moves,” Novogratz said. “And then we'll see a long period of consolidation. And what happens there, you're turning over, old guys selling, new guys buying. And you're waiting for the new narrative to arrive. That brings the next wave of money in. And I think we're in one of those periods right now.”
One potential catalyst would be the approval of a Bitcoin ETF by the Securities and Exchange Commission (SEC). At the moment, there are 10 ETF applications pending approval, one of which is from Novogratz’s Galaxy Digital, according to Yahoo Finance.
“The big wealth in America is 50- to 80-year-olds, they typically work through RIAs, registered investment advisors,” Novogratz explained. “They're slower to buy in — that trend has started — the ETF just makes it easier. And so yes, if we had an ETF tomorrow, the price would go higher.”
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