Bitcoin could fall as much as 20% after breaking $100,000 as levered bets unwind, crypto billionaire Mike Novogratz says
As bitcoin charges through a string of record highs, investors should brace for a pullback that briefly snaps the rally, Galaxy CEO Michael Novogratz told CNBC.
“There’s a ton of leverage in the system right now,” the billionaire investor said, and added: “The crypto community is levered to the gills, and so there will be a correction.”
Though Novogratz is certain that the apex token will soon cross the six-digit threshold, he outlined that it could eventually fall as far $80,000, although he sees that as the absolute floor. That would represent a 20% decline from the $100,000 threshold.
Levered stocks and ETFs also look primed for trouble ahead, he said, citing MicroStrategy as one example.
“There will be some sharp corrections, certainly in the stocks that are more levered than the underlying commodity itself,” Novogratz said.
Still, it’s “inevitable” that bitcoin will hit $100,000 , he said— the currency peaked at more than $98,000 on Thursday.
Even if a correction is coming, Novogratz is also convinced that bitcoin will eventually regain its footing and proceed higher, as president-elect Donald Trump has brought about a “paradigm shift” for crypto regulation.
“The entire cabinet almost owns bitcoin, and are proponents of digital assets,” Novogratz said of the incoming administration. He added: “So the people around that table are very pro this space. They’re pro-innovation, they’re pro-digital assets, they’re pro-bitcoin.”
According to him, the world has taken notice, with a rush of buying from the Middle East and “inexhaustible demand” from public equity markets.
“Normally you hit 100, you bounce off a bit,” he said. “I would not be surprised if you know, we go much higher. We’re in price discovery. There’s not a lot of supply.”
