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Bitcoin will see a correction before hitting a new record, Mike Novogratz told Bloomberg TV.
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The token could fall to around $50,000 before surging higher this year.
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The market is too leveraged as investors chase the high, but spot bitcoin ETFs provide long-term upside.
As bitcoin rockets toward its all-time record, a correction is likely before the token can settle at higher levels, Galaxy Digital CEO Mike Novogratz told Bloomberg TV.
“I wouldn’t be surprised to see some correction and some consolidation, but I’m very loath to pick a bitcoin high because I really do believe this is price discovery,” the billionaire crypto enthusiast said.
A correction would see it fall to the mid-$50,000s, before surging to a new high, Novogratz added.
This week, the leading crypto coin jumped 20% to surpass the $60,000 mark, as spot bitcoin ETFs continue to draw in fresh inflows. The recently approved funds — the first of their kind in the US — have pushed bitcoin into a “price discovery” phase.
“So you’re seeing, you know, a step function in new owners of bitcoin, which is driving, I would say, a frenzy and the whole crypto ecosystem,” he said. But with that, the market has become too frothy,
The ETFs have also brought in more retail investors, who are trading on an unsustainable amount of leverage. Many of those chasing the high, especially millennials and Gen Z traders, could get burned.
But over the longer course, baby boomer wealth in these funds will take bitcoin much higher, with the token set to overtake its 2021 peak of around $69,000.
As this retiring cohort accounts for around $85 trillion in wealth, Novogratz said, a small shift of 1% to 3% of boomers’ investments into bitcoin could provide a massive tailwind.
“3% of that is two and a half trillion. The whole market cap of bitcoin is only a little more than 1.2 trillion,” he said.
Read the original article on Business Insider