Wall Street names can’t resist making bold predictions – history tells us that. Showing that he’s not afraid to put his neck on the line, Mike Novogratz – a former Wall Street power player and currency Galaxy Digital CEO – has predicted that cryptocurrency is “five or six years away” from mass adoption. His comments came at South Korea’s recent Beyond Blocks conference, where he was able to express not only how far the crypto sector has come, but also how far it still has to go.
It’s Close, But Not That Close
Novogratz has a rather blinding faith in the crypto sector, as he feels that institutional investors will arrive on mass “in the next two to three years.” With this being the move that lights the blue touch paper for the crypto market. He’s also remained optimistic on mass adoption, but also warned that it isn’t as close as some experts and analysts would have you believe. “You won’t see mass adoption until the user experience does not feel like something new and that is still five to six years away,” he said.
Standing in the Way
What’s delaying mass adoption according to Novogratz are a number of major obstacles. Speaking on specifics, he said that the “cost of technical talent” is becoming a serious problem, as the talent pool that Blockchain and crypto focused projects can pull from is extremely small. He also believes that the lack of conventional investors is an issue, as there is “no clear precedent for the financial industry” when it comes to investing in crypto.
Slowly Coming Around
Even though mainstream forces are slowly coming around to Bitcoin – see Goldman Sachs’ decision to open a crypto trading desk as a prime example – there is still something of a stigma attached to crypto investing. Novogratz feels it’s hard to discuss crypto in the mainstream without a trusted name backing it, “Think about how institutional investors operate. It’s hard to tell your boss ‘I have money in places you have never heard of.’ You need a trusted, name custodian — a Japanese bank or HSBC or ICE or Goldman Sachs — to allow institutional investors to feel comfortable.”
Regulation Remains an Issue
Novogratz also believes that the government isn’t doing enough when it comes to addressing the regulation of the sector, feeling that this is steering people away from the crypto market. He also rubbished the idea that Bitcoin and its rivals are simply too technical for mainstream investors to get excited about. Like others within the sector, Novogratz is of the understanding that knowledge regarding the technical side of Blockchain and cryptocurrency isn’t required in order to get the most out of it.
The argument that retail investors are effectively being ignored in favor of professional financial institutions is only getting louder. Regulators seem far too happy to concentrate on the likes of Goldman Sachs and JP Morgan instead of the retail sector – with the latter actually having the power to boost the market. Priorities are often an issue for regulators when it comes to the crypto space, with Novogratz effectively stating that they’ve got it wrong thus far.
Wise Words from Novogratz
When you look at Novogratz background, it’s clear to see why his opinion is respected. Standing as one of the leading money makers in 2018, he was a Goldman Sachs mainstay before launching Galaxy Digital earlier this year. He’s also been on something of a forecasting hot streak. Not only did he predict that Bitcoin would hit a $10,000 high by December 2017 – it actually reached double that – he also backed Ethereum’s rise.
Novogratz rarely shoots wide of the mark with his predictions, so if he believes that Bitcoin is less than a decade away from mass adoption we might we wise to take notice.