Novogratz warns that there will be a bitcoin correction, says crypto is ‘levered to the gills’

[Pelican Press 0]

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Novogratz warns that there will be a bitcoin correction, says crypto is ‘levered to the gills’

Bitcoin is poised to breakthrough the long-awaited $100,000 level after its postelection rally, but that doesn’t mean the leading cryptocurrency will go up in perpetuity, said Galaxy Digital CEO Michael Novogratz. Bitcoin was trading at about $97,000 on Thursday morning, after setting a new record high of $98,367.00, according to Coin Metrics. Novogratz said on ” Squawk Box ” that reaching the six-figure mark felt “inevitable” and that bitcoin could continue to rally from there, but a pullback will come eventually. “There’s a ton of leverage in the system right now. … The crypto community is levered to the gills, and so there will be a correction,” Novogratz said. BTC.CM= 1M mountain Bitcoin was trading at new highs on Thursday. However, Novogratz said he did not expect bitcoin would ever fall back below $80,000, which is where it was before the election of Donald Trump. He did caution that the correction could be greater in stocks, like MicroStrategy , that are trading like leveraged versions of bitcoin. Shares of MicroStrategy are up 650% year to date as the software company’s bet on crypto has sparked a frenzy of retail trader interest. The company took out more debt this week in the form of convertible bonds to increase its bitcoin holdings. The success of MicroStrategy appears to be tempting some other companies to explore adding bitcoin to their balance sheets, including Acurx Pharmaceuticals . “I personally would tell my investors to buy straight bitcoin” instead of plays like Microstrategy, Novogratz said. Bitcoin has rallied sharply since the election, as President-elect Trump and his administration are seen as more friendly to the crypto industry. The rally has continued despite a mystery seller that has been dumping crypto in recent days, Novogratz said. “There had been a giant seller for the last week, between 92, 93 and 94. Probably $14-15 billion of bitcoin sold there,” Novogratz said. Novogratz is a long-time crypto investor. His firm Galaxy Digital invests in both digital assets and companies that specialize in that space.

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