On Bloomberg TV, Michael Novogratz, Fortress Investment Group’s Director and Principal spoke about why he is buying Bitcoin. Both he and his firm have made investments in Bitcoin, but Novogratz has made more than the firm.
Why is Michael Novogratz Buying Bitcoin?
When asked why he was buying bitcoins, Michael Novogratz answered,
“If you look at the total market cap of bitcoin it’s probably somewhere between 4.5 to 5 billion dollars. There are, in best estimates, somewhere 30 thousand individuals programmers working on bitcoin.”
Novogratz mentioned that a college roommate who lives in Barbados works full time on derivatives of Bitcoin. He explained,
“So there is an open source community where there is huge brain power, let alone all the seed money that is going in. And so from Marc Andreessen and his company, to Benchmark, to Wences Casares, there’s lots of smart money going in. I’ve never seen a small project with more human capital going into it, and so I kind of want to bet just on that alone.”
Speaking about the risks of Bitcoin, Michael Novogratz says that the digital currency has the advantage of being the first of its kind. However, he mentions that there will be a sort of revolution in what we know as payment systems. In fact, Novogratz believes that there will be a “democratization of finance at one point.”
When asked what he meant by that, Michael Novogratz answered,
“I think you’ll see peer to peer lending. The banks’ biggest threat is the same thing that’s happened in so many other industries now. Happening to finance industry. Right. The internet disintermediates large players, and I think Bitcoin is just one of the threats that the finance industry as we know it, has come against it.”
It is interesting to note that prior to joining the Fortress Investment Group, Novogratz was a Goldman Sachs partner. This means that he was dealing with different banks and therefore has plenty of experience with them. As such, it is fascinating that coming from such a background, Novogratz has been investing in Bitcoin. It is evident that he does see the potential in the digital currency.