Former Goldman Sachs executive Michael Novogratz has seen his fortune rise and fall in the traditional finance market several times. However, his bet on cryptocurrency in 2013 has paid off handsomely. According to a Forbes estimate, Novogratz is amongst the wealthiest people in the cryptocurrency sector, with an estimated crypto-wealth of $700 million – $1 billion.
Wall Street to Cryptocurrency
After the U.S. housing market crash of 2008, companies, individual investors and fund managers faced a liquidity crisis. While the banking industry was at the center of all monetary transactions, cryptocurrencies worked on a P2P model and did not need an intermediary to complete transactions.
Novogratz believes Bitcoin’s launch by mysterious creator Satoshi Nakamoto was an aftermath of the economic condition, and refers to the pioneer cryptocurrency as the “decentralized revolution.”
In 2013, Novogratz invested $7 million of his fortune in cryptocurrencies, and in 2016, bought ether (ETH) when it was trading at a price of $1.
In November 2017, the 53-year old announced plans to launch a cryptocurrency hedge fund valued at $500 million. However, the project was shelved in January 2018, and replaced by plans of building a merchant banking business for the cryptocurrency industry.
Building the Goldman Sachs of Crypto
The cryptocurrency merchant bank, Galaxy Digital, is touted as Novogratz as the Goldman Sachs of digital assets. The firm will venture into managing cryptocurrencies, invest in ICOs and provide advisory services to technology companies issuing tokens.
Cryptocurrencies have given the former hedge fund manager a shot at redemption. He was known at his firm after shorting the Thai Baht before the Asian financial crisis in 1997. However, the trader was shown the door after making a wrong estimate about the economic outcomes of the Brazilian general elections.
While Novogratz may have mixed results on his bets on Wall Street, his investments in cryptocurrencies have given astonishing returns. Interestingly, Novogratz has famously called the digital asset class a bubble but operates with the typical mindset of a Wall Street trader looking to make money irrespective of their belief.
Novogratz does not believe cryptocurrencies will replace the dollar, yen or any other fiat currency, but become a significant driving force for developing countries suffering from hyperinflation, political uncertainty, and an unstable fiat currency.