Bitcoin Can Hit $40,000: A Top Hedge Fund Manager

 

The former Fortress hedge fund manager Michael Novogratz sees Bitcoin has a potential of growing almost four times by the end of 2018. Now it’s trading at  $9,800, remaining about $200 to reach the mark $10,000.

“Bitcoin could be at $40,000 at the end of 2018. It easily could,” Novogratz said on the CNBC show Fast Money. He added,“Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well,”.

Ethereum is the second largest publicly traded cryptocurrency by market cap. According to CoinMarketCap it hit a record high of $493.40 on Monday.

Novogratz attributed the cryptocurrency sector’s rambunctious growth prospects to an influx of new money, particularly from Asian investors, and to cryptocurrencies’ finite amount of units: 21 million coins in the case of Bitcoin. This means that in contrast to commodities like oil or agricultural products, producers can’t choke or expand supply in response to market fluctuations.

Novogratz has more than 20% of his net worth entrusted in cryptocurrencies. He told CNBC, he doesn’t recommend others adopt such a strategy. An appropriate figure for retail investors it would be 1% to 3% of net worth. He suggested professional investors to perform about 5% to 10% of their net worth.