Popular Bitcoin bull and billionaire, Mike Novogratz has taken inspiration from high school chemistry to weigh the future of Bitcoin.
As Solid as Gold
A good number of analysts have contrasted and disagreed on the similarities of gold with digital currencies, especially Bitcoin in terms of store value. While governments and central financial institutions have weighed and butted in the discussion stressing the volatility of digital currencies, Novogratz has once again declared his enduring love for Bitcoin, dubbing the dominant digital currency a ‘digital gold.’
The former Goldman Sachs partner reclined on his seat to draw inspiration from high school chemistry only to quickly explain after his audience was at a loss.
“There are 118 elements on the periodic table,” he beamed. “only one – gold – is valuable just because of its store of value. Bitcoin is going to be digital gold.”
Although he admitted that the latter might be more volatile and unstable, he stressed that it holds some advantages over gold whose value has stood the test of time. To store gold and ensure its security, its hodlers has to pay extra money and lock it away in secure facilities. He painted his illustration with the highly famed Ft. Knox in Kentucky which houses the United States official gold reserves.
“We keep gold surrounded by guns and deep vaults,” he said, referring to the host of army posts assigned to the facility. “It costs money to store gold because gold is a store of value. So the idea that it’s supposed to be free and cheap is misguided. That’s what makes Bitcoin unique. It requires security that other cryptos don’t need.”
Bitcoin Capitalizing on Institution than Retailers
Novogratz also discussed with Bloomberg the growing interest of large institutions in bitcoin. He sees the effect of last year’s severe bear market wearing off soon, as more institutions prepare to join on the bitcoin wave. Last year, Yale University, with the second largest endowment fund in the US invested in the crypto sector. Novogratz believes more institutions will begin to get involved once custody solutions are put into place.
“The turnkey moment is when custody solutions begin to come online. We will see that happen over the next few months,” he said.
There are about five significant custody solutions about to weigh in the cryptocurrency sector this year: the prominent of them being Fidelity Custody Solution—which is set to launch as early as next month, and Bakkt.