The millionaire investor Mike Novogratz, assures that the use of Bitcoin, for the time being, is limited to the reserve of value and not as a means of exchange.
Billionaire investor Mike Novogratz, believes that the use of Bitcoin as a currency is not on the horizon for now. However, he says that while that time is coming, the most popular of the digital coins is being used widely and effectively as a high-capacity reserve of value.
„I believe that Bitcoin will not be used as a transaction coin for the next five years,“ said Galaxy founder and CEO. He made the statement during an interview with Bloomberg.
These statements from Novogratz come at a time when Bitcoin is going through the best run of the year 2020. Over the past few days, the price of cryptomoney has hit the $13,000 mark as a result of PayPal’s announcements regarding digital currencies.
Novogratz does not believe in the use of Bitcoin as a currency in the short term
One of the reasons why Mike Novogratz believes that the use of Bitcoin Billionaire, as a currency, will not happen in the short term, is its scope. Only small percentages of the population in economically advanced countries know about and use crypto-currency as a means of payment.
For example, in the United States, reports explain, only 7% of the population has ever used Bitcoin. In other nations such as Vietnam or Turkey, the percentage is higher. However, at best, the use of Bitcoin is less than 30% of the economically active population.
In this sense, adoption is the main obstacle to be overcome for the currency to acquire the status of money. According to the investor, this barrier should be overcome in the next five years or more.
This would depend on the time it takes for the central banks‘ or CBDC’s digital currencies to come into effect. Consequently, they would allow the tokenisation of hundreds of millions of people, who would learn everything about digital currencies.
Moreover, when people realise that there is a decentralised, secure and more popular cryptomoney like Bitcoin, they will consider it one of their favourites, especially because of its scarcity and constant valorisation, which makes it not only different but superior to stable currencies. But, until then, as Novogratz says, Bitcoin only works as a refuge of value.
A reserve of value
Thus, taking into account the factors by which Novogratz assures that the use of Bitcoin, as a currency, is not on the agenda in the short term, appears what he considers the current function of this currency.
In this sense, the expert points out that Bitcoin is today, and especially in this context of pandemic and crisis, a reserve of value. One of the reasons why it is being adopted as such by a growing number of large-calibre investors is the weakness of the US dollar and the fears that have been triggered by the upsurge in infections of the new coronavirus.
„Therefore Bitcoin, as the digital gold that it is, is going to keep growing,“ Novogratz stresses. At the same time, he points out that more and more people are going to want a piece of Bitcoin as part of their portfolios.
During the course of this week, the price of Bitcoin grew by approximately 13% and reached the barrier of USD 13,000 per currency. This is the best run of the pioneering cryptomoney this year, 2020.
Data to take into consideration
- Billionaire Mike Novogratz, is founder and CEO of Galaxy Investment Partners.
- The price of Bitcoin, at the time of writing, is $13,100 per unit.
- Paul Tudor Jones has highlighted Bitcoin’s qualities as a store of value.
- During 2020, the number of professional investors who have bet on Bitcoin has increased considerably.