Former Fortress hedge fund manager, Michael Novogratz, sees enough bullish sign in the cryptocurrency segment. This is based on a reported valuation of Coinbase for billions of dollars suggesting the legitimacy of the sector. Though the sector is undergoing some sluggishness, no one wants to rule out the potential the digital coins will have in the upcoming years.
Negotiating A Deal
Coinbase is working on an investment agreement with Tiger Global thus valuing the cryptocurrency exchange for approximately $8 billion, CNBC reported. This will indicate that the deal would undoubtedly be one of the highly valued startups in the United States’ history. While stating that Tiger’s is not an investor flake, Novogratz said that
“Here’s the poster child of the crypto space worth $8 billion – that’s a real company.”
He viewed them as smart and savvy guys while participating in the Economist’s Finance Disrupted conference. The digital currency exchange is keen to raise a maximum of $500 million, and the Street was not sold on the virtual asset’s value. The latest valuation comes amidst some unfavorable comments coming from billionaire investor, Warren Buffett, who termed bitcoin as a “rat poison.”
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Significantly, another hedge fund manager, Ken Griffin, told media that the existing crypto has several “elements of the tulip bulb mania we saw back hundreds of years ago in Holland.” He referred the tulip craze seen during the 17th century, and that was regarded as the first big financial mess. There are also others like Dennis Gartman who has taken a similar comparison.
Novogratz said that the news about Coinbase comes in the wake of bitcoin being branded as “tulip-mania.” Significantly, the price of bitcoin plunged over 53 percent in the current year alone after peaking to a lifetime high in December last year. Similarly, other digital coins such as ether and XRP have suffered a drop of 65 percent and 76 percent respectively in the current year alone. Despite these negative factors, Novogratz thinks that big institutional investors will pour their money into bitcoin soon.