Mike Novogratz, the founder of Galaxy Digital, has expressed optimism to investors about the potential institutional adoption of cryptocurrencies in 2024. This adoption, he predicts, will largely be driven by the anticipated approval of Bitcoin spot exchange-traded funds (ETFs).
During Galaxy Digital’s Q3 2023 earnings call on November 9, Novogratz underscored the company’s belief that the approval of several Bitcoin spot ETFs is inevitable. Galaxy Digital, in partnership with Invesco, has already filed applications for spot Bitcoin and Ether ETFs with the U.S. Securities and Exchange Commission in the third quarter of 2023.
Investor sentiment has turned bullish as of November 2023, with leading ETF research analysts forecasting the SEC’s approval of 12 major Bitcoin spot ETF applications by January 2024. Novogratz anticipates that 2024 will be marked by significant institutional entry into the market, beginning with a Bitcoin ETF and likely followed by an Ethereum ETF.
Novogratz suggests that governmental endorsement of Bitcoin will boost confidence among other financial allocators, leading to broader investment in the cryptocurrency space. He anticipates that by 2025, institutional investment will surge, particularly in areas like tokenization and wallet technology. He emphasized the importance of dollar-backed stablecoins in maintaining the dominance of the U.S. dollar in the cryptocurrency ecosystem.
Novogratz believes that a Bitcoin ETF will not only bring institutional trust but also a substantial influx of funds into the cryptocurrency market, fostering growth and innovation. He maintains that the long-term trajectory of crypto remains on track.
The conversation also touched upon the potential impact of an Ether spot ETF. Novogratz noted that its reception might differ from that of a Bitcoin ETF due to Ethereum’s staking model and associated yields. He pointed out that unless an ETF can integrate staking rewards, it might be less attractive compared to directly owning and staking Ethereum through services like Galaxy Digital.
He highlighted the importance of utility in the cryptocurrency space, stressing that different blockchains and their tokens must serve a purpose and support practical applications to maintain their value over time.
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