Novogratz: ‘Galaxy is Making More in a Day Than in All of 2018’

The last time Michael Novogratz, the founder and CEO of Galaxy Digital, worked this hard was in 1997 during the Asian financial crisis. 

But Novogratz isn’t in the midst of a cascading currency crisis tearing apart emerging markets in the East. Rather, as he shared in a recent Canaccord Genuity webinar, he’s guiding a company through a booming market. 

“In 2018 we started Galaxy thinking the institutions were going to come, but at the time a lot of infrastructure was being built and they just didn’t come,” he said during the webinar. “We once sat waiting for the institutions to come, now I can’t hire people fast enough.”

Novogratz, who recently predicted that bitcoin would hit $100,000 by the end of the year, believes that every company will eventually be adding bitcoin to their balance sheet.

Why? It’s one part hedge against inflation as well as currency debasement, and another part signaling to Generation Z that the boardroom is aware of the limitations of traditional finance.

The economy is a “bull in a pen” waiting for the flag of re-opening to drop, bringing about a forecasted seven percent growth, while asset inflation is skyrocketing because “we are printing too much money.”

“Ride the airplane, but in the seat closest to the exit,” Novogratz said, pointing out that the place of bitcoin in a portfolio is as a hedge against the possible consequences of an extraordinary level of stimulus from ‘infinity Fed’, not a prediction about what’s to come. 

“If it gets to $1 million per coin, it’s because stuff has gotten really bad here,” he said. 

As for Gen Z, they see the system as rigged and structural inequality at all time highs, Novogratz believes recalling how he saw plenty of  “Eat the Rich” signs at Black Lives Matter rallies in the wake of the death of George Floyd. This same anger at an unfair system, he said, manifested itself during the Capitol Hill protest, and, more recently, the attack on short sellers that had GameStop in their sights. 

“Corporations need to listen and put a bit of bitcoin on the balance sheet,” he said, guessing that Tesla probably made more money in the last month holding bitcoin than it took as profit selling cars in the last two years.  

As for what’s next, Novogratz said that bitcoin is getting ready to “blow through gold” as its simply a better version of it.  

“Paradigms don’t get replaced. They explode,” he said.

Then there’s the power of blockchain, the property that makes it better than gold. The businesses that are going to be built on top of this “giant supercomputer” are going to make traditional financial institutions like Canaccord and Bank of America nervous. 

“Bitcoin has gone viral and we’ve crossed the point of no return as a macro asset,” he said.