The crux of Michael Novogratz’s crypto crusade is for money to be subject to open transparent competition
Like any other important good or service in a market economy. So Michael Novogratz’s crypto crusade is about taking on the money monopolists (central banks and governments) whose initial reaction has been to vehemently reject this change.
The first chapter of cryptocurrencies begins with mainstream vilification then Bitcoin Cryptocurrency crackdown and the ridiculing of crypto investors.
A good crusade is like a wild horse, it can’t be easily tamed so the money monopolists have given Michael Novogratz’s crypto crusade some leeway
Bitcoin’s rival could be the story of 2019. Michael Novogratz’s crypto crusade could gather momentum going forward and here is why.
“Bitcoin is not going to be a payment currency, it’s going to be just like gold”
Monetary policy is currently stuck between a rock and a hard place. If left-leaning monetary policies are adopted then that will give momentum to the crypto bulls. Reckless public spending tends to always debase the currency into oblivion. The USD is the last fiat currency domino to fall but already there is a growing list of countries at risk of a currency crisis. For example, Argentina’s peso is down more than 50% versus the dollar, the Turkish lira is down 41% year to date and emerging market currencies are particularly at risk.
If on the other hand a right-leaning monetary policy is adopted, such as lower interest rates that would reduce the opportunity cost of holding alternative assets. So lower interest rates would also stimulate demand for alternative assets such as precious metals and cryptocurrencies.
Sam Zell’s low-interest rate caveat is also throwing the cat among the pigeons who advocate slashing interest rates to keep the economy fuelled.
It would be “a disaster” that would threaten the dollar’s status as the world’s reserve currency, argues Sam Zell.
“I think you need a redistribution of wealth, there are a lot of different ways you can do that” – Michael Novogratz
Michael Novogratz’s crypto crusade would be energized by Modern Monetary Theory (MMT)
MMT is a heterodox macroeconomic theory that describes currency as a public monopoly for a government and unemployment as the evidence that a currency monopolist is restricting the supply of the financial assets needed to pay taxes and satisfy savings desires.
Put simply the likes of Rep. Alexandria Ocasio-Cortez (an MMT advocate) is arguing that the government should use fiscal policy to achieve full employment, creating new money to fund government purchases. Rep. Alexandria Ocasio-Cortez is proposing that MMT should fund her Green New Deel.
“She is the gift that keeps on giving. For the crypto space, her push for MMT does just that” said Michael Novogratz.
Billionaire investor Carl Icahn also recently condemned (MMT) as a solution to the anticipated economic downturn. Carl Icahn warned that an interest rate slash could cause an inflationary spiral.
Michael Novogratz’s crypto crusade is also a war on crony capitalism
The macro trader turned bitcoin bull Michael Novogratz is calling for fixes to capitalism which entails a possible tax on Wall Street as a solution.
Michael Novogratz cites the widening income wealth gap and a lack of investment in public education in the US. One place to start could be a “controversial” Wall Street transaction tax, which would also extend to cryptocurrency trades, said Michael Novogratz.
“I think you need a redistribution of wealth, there are a lot of different ways you can do that” Novogratz said on CNBC’s “Squawk Box ” recently. “I think a Wall Street tax is an interesting one” he added.
Michael Novogratz has joined a growing band of heavyweight investors who have come out and criticized the current economic system.
Capitalism is in crisis and at a crossroad, according to Ray Dalio’s capitalism critique.
Ray Dalio’s capitalism critique explains that the income/wealth/opportunity gap is leading to dangerous social and political divisions that threaten our cohesive fabric and capitalism itself.
Moreover, Warren Buffett, Jamie Dimon, Howard Schultz, and other business leaders have called for fixes to a widening income gap and under-investment in public education.
“Galaxy Digital Holdings, the crypto merchant bank founded by former hedge fund manager Michael Novogratz, recorded $75.5 million in paper losses on crypto it held at the end of 2018”
Michael Novogratz’s crypto crusade also comes at a cost
Galaxy Digital Holdings, the crypto merchant bank founded by former hedge fund manager Michael Novogratz, recorded $75.5 million in paper losses on crypto it held at the end of 2018. Michael Novogratz fund reported $8.5 million in unrealized losses on investments in companies and $88.4 million in operating expenses.
For all of 2018, its first full year of operation, the company lost $272.7 million
The majority of the red ink in 2018, $101.4 million, came from selling digital assets at a loss.
At the end of 2018, Galaxy held 9,724 bitcoin ($36.4 million), 92,545 ether ($12.3 million), 2.4 million EOS ($6 million) and 60,227 of monero ($2.8 million). The firm increased its investment in bitcoin and ether from the beginning of the year when it held 5,902 BTC and 57,000 ETH.
Bitcoin was the biggest source of losses at the beginning of 2018, while ether caused the most damage during the rest of the year.
Will Michael Novogratz’s crypto crusade eventually breakeven
Bitcoin has made an impressive recovery since the beginning of 2019 up 128% in three months at 8.744 USD at the time of writing this piece, nevertheless, it is still well below its all-time high of nearly 20,000 USD just a few years ago.
“Bitcoin is not going to be a payment currency, it’s going to be just like gold” he said. “It won that lane” said the ardent crypto bull Michael Novogratz.