Mike Novogratz: This Will Be Bitcoin’s Year

Siamak Masnavi

Even though Bitcoin's price has been quite volatile during the COVID-19 crisis, Michael Novogratz, a former Goldman Sachs partner, as well as Founder, Chairman, and CEO of crypto-focused merchant bank Galaxy Digital, believes that 2020 will Bitcoin's year.

World Health Organization (WHO) says that the first time it heard about a COVID-19 case was on 31 December 2019 when "the WHO China Country Office was informed of cases of pneumonia unknown etiology (unknown cause) detected in Wuhan City, Hubei Province of China"

According to data from CryptoCompare, Bitcoin started the year at $7,189, reached $10,360 (its highest price this year) on February 14, fell to as low as $4,240 (its lowest price this year) on March 13, and is currently (as of 09:30 UTC on March 23) hovering around the $5,800 level: 

BTC-USD 3 Month Chart on 23 March 2020.png

This means that in the year-to-date (YTD) period, Bitcoin has lost 19.32% of its value. This has naturally disappointed those Bitcoiners who were expecting the flagship cryptocurrency, which many of its fans refer to as "digital gold", to serve as a better store of value. By comparison, during the same period, the price of physical gold has gone from $1,519 to $1,491, i.e. a loss of only 1.84%.

Gold Chart on 23 March 2020.png

Although before the COVID-19 outbreak many people had claimed that Bitcoin was a non-correlated financial asset, during this pandemic, Bitcoin has shown a high degree of correlation with the S&P 500 Index, which has fallen 28.66% in the YTD period:

S&P 500 Chart on 23 March 2020.png

Crypto startup Santiment, which focuses on behavior analytics, commented on this correlation on March 20:

Although Novogratz's confidence in Bitcoin seemed low on March 13 when he tweeted that "global confidence in just about anything" (including Bitcoin) had "evaporated", Bitcoin's 36.79% bounce back since then -- i.e. from $4,240 to $5,800 -- seems to have renewed his confidence in Bitcoin because on Sunday (March 22), he sent out the following tweet:

Perhaps the most interesting reply to Novogratz's tweet was from Bill Barhydt, the Founder and CEO of crypto startup Abra:

Crypto analyst/trader Willy Woo also seems to think that once Bitcoin has found its bottom (i.e. once we have seen capitulation), it will "moon":

 Then, earlier today, Woo said that decoupling of safe haven assets such as Bitcoin and gold may have already begun:

Crypto influencer Ran Neuner appeared bullish about the outlook for Bitcoin earlier today after watching an interview with Neel Kashkari, head of the Federal Reserve Bank of Minneapolis, aired last night on American TV (CBS) news program "60 Minutes", during which Kashkari said there is "an infinite amount of cash" at the Federal Reserve (America's central bank):

Update on 23 March 2020 at 13:15 UTC:

At 12:00 UTC, the Federal Reserve issued a press release to announce what several influencers in the crypto space are referring to as "Quantitiative Easing Infinity":

These were two the key parts of the press release:

The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.

Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.

This was the reaction by Anthony Pompliano (aka "Pomp"), Co-founder and Partner at Morgan Creek Digital:

The US stock market has welcomed the news, with the S&P 500 futures currently up 55.75 (or 2.44%) in premarket trading.

As for Bitcoin, although it was trading below $6K before the Fed's announcement, it is currently trading at $6,318, up 3.4% in the past 24-hour period:

BTC-USD 24 Hour Chart on 23 Mar 2020.png