On Sept 13, Michael Novogratz, former hedge fund manager and now a founder of crypto-focused merchant bank Galaxy Digital LP, declared on Twitter that cryptocurrency prices have reached a bottom. Novogratz tweeted an image of the Bloomberg Galaxy Crypto Index (BGCI), which shows the ups and downs of the biggest cryptocurrencies traded in U.S. dollars. Galaxy Digital LP invests in crypto businesses, from ICOs to infrastructure platforms to wallets and custody solutions.
This is the BGCI chart...I think we put in a low yesterday. retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble... markets like to retrace to the breakout..we retraced the whole of the bubble. #callingabottom pic.twitter.com/EasTBYgjSj
— Michael Novogratz (@novogratz) 13 September 2018
The chart viewed in the tweet is the one-year chart for the BGCI, an index launched on May 9. as a result of a collaboration between Bloomberg LP and Galaxy Digital Capital Management LP which is “designed to track the performance of the largest, most liquid portion of the cryptocurrency market.” The BGCI website said: “it is (BGCI) market capitalization-weighted and measures the performance of ten USD-traded cryptocurrencies, including Bitcoin, Ethereum, Monero, Ripple, and Zcash.”
Crypto analytics firm BittsAnalytics agreed with Novogratz based on Bitcoin sentiment analysis.
Regardless of the statements, there are many that support that the long-awaited reversal is around the corner.
Mohamed El-Erian, the chief economic advisor at Allianz and a financial market analyst, recently revealed that he is bullish on the prospects of the cryptocurrency market. In an interview with Yahoo Finance, El-Erian noted: “Crypto is not dead, and certainly the underlying technology is not dead. We’re going to see more widespread adoption, by both the private and public sector, of the blockchain technology and related technologies.”
He also said that for multi-year positions that $5,000 will be a great collection zone for investors, referencing a statement he made in June this year.
“In terms of crypto, what we’re getting is the realization that adoption is not going to be as big and as quick as the proponents of crypto would like. I think it’s going to be there,” El-Erian expressed that the worldwide of adoption won’t occur in a short period of time, “it’s going to last for a long time, it’s going to play a role in the ecosystem, but it’s not going to be the currency that a lot of proponents would like it to be.”
Popular cryptocurrencies such as Bitcoin, Ethereum, and Bitcoin cash have fallen deeply this year and are trading well below the highs seen late last year. In 2018, Bitcoin has sunk about 51 percent, while Ethereum and bitcoin cash is down by 73 percent and 82 percent, respectively. Still, Novogratz thinks digital currencies will bounce back. “Markets like to retrace to the breakout,” he said. “We retraced the whole of the bubble.”
Cryptocurrencies have been under restraint amid increased investigations from regulators. Last month, the Securities and Exchange Commission rejected nine proposals for Bitcoin ETFs. The SEC also halted trading in two Bitcoin and Ethereum-related products, citing confusion over materials characterizing them as ETFs.
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