Mike Novogratz is starting up the largest cryptocurrency focused hedge fund in the world.
Yes you read that right, not only will it be cryptocurrency focused, but it will be the largest of its kind in the world.
By quite a large margin actually.
Only two other hedge funds have raised tens of millions of dollars for the purpose of investing in cryptocurrencies, Polychain Capital and MetaStable Capital.
This fund is looking to dwarf those by raising close to $500 million.
Some Specifics:
The fund will be called the Galaxy Digital Assets Fund.
Novogratz will put up roughly $150 million of his own money and is looking to raise roughly another $350 million from family, accredited investors, and other hedge fund managers.
Although he can't comment on much of the specifics publicly just yet due to SEC rules, he is anticipating the fund will be fully capitalized and ready to go by January of 2018.
Why does the name Mike Novogratz sound familiar?
Mike Novogratz was formerly the CIO at Fortress Investment Group LLC before it closed shop back in 2015 and was later bought out by Softbank Group earlier this year (Feb. 2017).
He has a long history with macro trading, including spending time with Goldman Sachs.
Which is partly what makes his interest in cryptocurrency so interesting.
What is a macro guy doing getting involved with something that is so, well, abstract?
Why cryptocurrency?
Novogratz first become interested in cryptocurrencies when he lost one of his best employees a few years back to blockchain technology.
He thought, this is the start of something big if I am losing one of my really smart and talented employees to something that can pay him even more than I can.
Not long after, Novogratz made his first investments in Bitcoin and Ether.
His Ether investment was one he would end up making a fortune on.
He said he bought roughly $500k worth of Ether for under a dollar and sold the majority of it over $300. The bummer for him was that he said he originally was planning on buying $2 million worth but couldn't get enough orders filled because of a lack of liquidity.
Novogratz's predictions for the future are the really exciting part.
He thinks Bitcoin and cryptocurrency are likely going much much higher.
Check out this quote by Novogratz:
"This is going to be the largest bubble of our lifetimes. Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it."
Woah.
He thinks prices are going way up from here.
Bubbles in general are formed around life changing technology. From railroads, to the internet, to blockchains. Every single one of those brought great innovation and massive price increases for a whole host of players.
The wheat eventually gets separated from the chaff, but not before outrageous prices are often reached.
Higher prices are coming?
Personally, I think we are part of a bubble as well, one akin to the dot-com bubble.
Great technology is coming (akin to the internet) and it is going to get way ahead of itself in terms of prices just like the tech stocks did in the 90's.
The question everyone wants to know (including myself):
What stage of that cycle are we in currently?
I would venture to say we have a few years left of substantially increasing prices ahead of us, before there is a great reckoning.
Lets read that last quote of his one more time...
“This is going to be the largest bubble of our lifetimes,” Novogratz said. “Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”
He's certainly putting his money where his mouth is, $150 million of his own dollars, and $500 million total.
Stay informed my friends.
Sources:
https://www.bloomberg.com/news/articles/2017-09-26/mike-novogratz-is-set-for-comeback-with-crytocurrency-hedge-fund
Image Sources:
https://www.fosterswiss.com/fondo-de-inversion-hegde-fund/fondos-de-inversion-hedge-fund-offshore/
https://www.coindesk.com/fortress-cio-mike-novogratz-explains-bullish-bitcoin/
https://bitnewsbot.com/institutional-investors-move-into-bitcoin-and-ethereum/
