Bitcoin is likely to remain under pressure for weeks after tumbling about 35% since hitting a record high last month, according to one of the biggest investors in the largest cryptocurrency.
“I think we are going to consolidate for a while, four to six weeks,” Michael Novogratz, chief executive officer of Galaxy Digital LP, said in an interview, calling a $40,000-to-$50,000 price range fair.
Bitcoin fell as low as $42,133 on Monday following a volatile weekend that saw Tesla CEO Elon Musk whipsaw investors with a series of tweets in the wake of his decision to stop accepting the coin for car purchases because of its environmental impact. Bitcoin’s digital ledger uses a worldwide network of computers to function, a process that’s become known as mining.
“I took his mining comments at face value,” Novogratz said. “I don’t think that’s Bitcoin-specific, that’s everything specific: The gold market, YouTube—all uses a lot of electricity. And Elon has businesses in clean energy.”
The cryptocurrency industry is looking at its Environmental, Social, and Corporate Governance (ESG), and how to mitigate Bitcoin’s impact through things like carbon offset credits, he said.
“Like all industries, ESG is important, and the crypto industry including Galaxy is going to address it,” Novogratz said.
The explosion in interest for joke coins like Doge—which Musk has been tauting on Twitter—makes it harder for people to take the broader cryptocurrency market seriously, Novogratz said in a Bloomberg Television interview. Yet he said there was real angst behind some of the support for Doge.
“What you’re seeing is a response against the monetary policies of the U.S. and the world,” he said. Crypto has become too tribal, so much so that a friend of his who criticized Doge on Twitter received six death threats, Novogratz said.
Bitcoin should still finish the year higher even after the recent slide, Novogratz said. The U.S. Securities and Exchange Commission could approval of a Bitcoin exchange-traded fund at the end of this year or early next year, he said.
“My guess is the next catalyst is the ETF,” Novogratz said.