Posted on

Ex-Fortress Billionaire: Crypto Market Will Be 'Largest Bubble of Our Lifetimes'

A former principal at Fortress Investment Group is reportedly moving to establish a $500 million hedge fund focused on cryptocurrency and blockchain.

Bloomberg News, citing a source with knowledge of the plans, reports that Mike Novogratz is investing $150 million of his own, with an additional $350 million expected to be raised from outside sources by the end of 2017. Novogratz opted not to confirm or deny his plans when asked directly, according to the outlet.

If true, the initiative would represent the billionaire hedge funder’s most aggressive move in the space to date. Novogratz previously made headlines earlier this year when he revealed that 10% of his net worth has been invested in bitcoin and ethereum. Speaking with Bloomberg, Novograts said that his stake in the market has since grown.

Even if he isn’t setting aside funds to back a cryptocurrency-specific hedge fund, Novogratz made it clear that he intends to take part in what he called “the largest bubble of our lifetimes.”

He told Bloomberg:

“This is going to be the largest bubble of our lifetimes. Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”

Image Credit: Acumen/Flickr

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].

Posted on

Bubble or Not, There’s Money to Be Made Off Bitcoin: Mike Novogratz

Mike Novogratz, the macro manager who left  Fortress Investment Group in shame after two years of losses, is looking to start a $500 mln hedge fund to invest in cryptocurrencies, initial coin offerings and related companies.

The swaggering investor believes that Bitcoin is a huge opportunity, but probably a fleeting one, as he both believes in the opportunities, but also that this is all a big bubble.

Novogratz is putting his money where his mouth is though, as he will invest $150 mln of his own money and then top up the remaining $350 mln from family offices, wealthy individuals and fellow hedge fund managers.

“Biggest Bubble of our lifetime”

If Novogratz is successful with his $500 mln fund, it will be the biggest of its kind. However, the investor, who took a self imposed exile from Wall Street, takes an interesting view of digital currencies.

“This is going to be the largest bubble of our lifetimes,” Novogratz said.

“Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”

Novogratz is renowned for being bold and brash, and it seems that the big swing and volatile digital currency space are exactly the kind of market he would thrive in.

“I sold at $5,000 or $4,980,” he said. “Then three weeks later I’m trying to buy it in the low $3,000s. If you’re good at that and you’re a trading junkie, it’s a lot of fun.”

Belief in the bubble

There have been polar opposite views on Bitcoin and digital currencies recently, from those who are in the know when it comes to investing.

People like Jamie Dimon of JP Morgan came out and slammed Bitcoin as a fraud, however, they were also seen to be looking in and exploring digital currencies and Blockchain technology.

These non-believers have recently seen their arguments backed up as governments and other regulatory bodies have cracked down in some areas of the world, namely China.

However, just like there are two sides to the Dimon coin, some even see the Bitcoin ban in China as an opportunity, and that is the way Novogratz is operating, despite calling it a massive bubble.

“In a lot of ways, this is a market like any other market,” Novogratz said. “You see the psychology of fear and greed in the charts the same way you’d see it in charts of the Indonesian rupiah or dollar-yen or treasuries. They’re exaggerated because of less liquidity and because you can’t get short.”