Bitcoin’s most recent, volatile 24 hours -- during which it lost more than a fifth of its value after hitting an all-time high on Wednesday -- was largely unconcerning to hedge fund legend Mike Novogratz, who painted a picture of a young cryptocurrency still adjusting to its extraordinary popularity.
“It speaks to the fact that this is still a young industry, a second or third grader growing up. And so the infrastructure really needed to catch up,” Novogratz, CEO of Galaxy Investment Partners, told FOX Business’ Liz Claman.
The cryptocurrency was trading near $9,610 late Thursday, with a daytime high hovering above $10,600, according to CoinDesk. On Wednesday, bitcoin prices fell more than $1,000 in the span of about 10 minutes, after setting an all-time high above $11,000 -- spurring some concern about its volatility. Others, however, attributed the fall to outages in bitcoin exchanges and the heavy price surge this week.
“It’s got me a little bit nervous as [a] speculator when you see that much of a frenzy, you’ve got to be a little nervous on price,” he said. “But bitcoin is going mainstream.”
Virtual currencies have been at the epicenter of debate this year, with some business moguls criticizing bitcoin as a “bubble about to burst.” CEO of JPMorgan Chase (NYSE:JPM) Jamie Dimon labeled bitcoin a “fraud,” while other executives have suggested it could be the currency of the future.
During Wednesday’s frenzy, Novogratz, who started a new bitcoin fund, sold some of his shares, though he declined to say how much. And despite uncertainty about the future of bitcoin and other cryptocurrencies, he suggested that retail investors place 2% or 3% of their net worth into it.
“I think the whole space will be far higher a year from now, and a lot higher five years from now,” he said.
During the White House press briefing, press secretary Sarah Sanders said the Trump administration, including the Department of Homeland Security, is monitoring bitcoin, which remains largely unregulated. That news was unsurprising to Novogratz, who speculated that the Federal Reserve and the Treasury Department have likely also monitored bitcoin.
“Our experience so far is that U.S. regulators have been very receptive to the whole cryptocurrency revolution,” he said. “They don’t want to squish innovation. They’re looking at this as an interesting movement.”