Definitely one of the most anticipated speakers at Beyond Blocks Summit Seoul 2018 was Founder and CEO of Galaxy Digital Capital Management, Michael Novogratz. It marked the first time he has ever spoken in Korea at an event, and it was reflected in the attendance inside the main conference hall – with every seat filled and rows of people standing at the rear.
The macro hedge-funder turned blockchain enthusiast is a born storyteller, always serving the audience with humour and charm. Having lived in Asia during his Goldman Sach years, Michael knows a thing or two about the culture — one thing being that what makes crypto in particular interesting in Asia, is that they love to gamble. In addition, he stated that it’s one of the most dynamic and fast-evolving parts of the world and that they will be:
“Certainly going to do business here in Korea”
Fireside Chat with Michael Novogratz at Summit Seoul 2018
Galaxy Digital Capital Management
His plans for Galaxy for Asia in the near future include opening offices in Hong Kong and Tokyo. Galaxy (the name coming from a Star Wars reference), employs around 75 people, and that number is expected to be in the hundreds by the end of the summer. Galaxy operates in four divisions:
- Advisory business — to advise and consult on mergers and set up ICO’s
- Trading business — macro trading, OTC, electronic market-making
- Asset management — the recent partnership with Bloomberg
- Direct investment business
“You’re not going to change the world with half a trillion market cap; a lot more money is needed from institutional investors. But for that to happen, there are still a few things missing”, Michael stated. Two of these things he refers to are:
“There are good solutions, but if you think about how institutional investors operate, it’s hard to explain to your boss when something goes wrong. You need a trusted name, like a Japanese bank, or an ICE, or a Goldman Sachs to make them feel more comfortable. Institutional investors are not going to invest until the solutions are there – even though there’s a lot of excitement.”
“It’s coming”, he said, following with how happy he is with the current posture of United States regulators. “Regulators come from the institutional world and all of them missed the first big move when it was just retailers. The SEC statement regarding Ethereum not being a security is a big deal, and it gave way to a path forward.”
Novogratz stated that he doesn’t believe regulators want to crush the whole system and that they are supposed to protect the little guy, “although they were doing ‘a crumby job’ of it”. “Regulators are engaged. and they need to be, and they are. As we get more regulatory certainty, institutions will feel more comfortable coming in”.
“In the long term, regulations are bullish because there will be more trust in the system”.
The Blockchain Industry
“We have (roughly) a hundred blockchains that are all trying to become the same thing. It’s a race to see who gets adoption. None of them are fast enough for real institutional applications, but we’ll see some of those soon”.
Michael asks himself: “How are you going to decide which project to bet on?”
Michael’s “simple answer”: Which projects have the most money behind them? This gives a good indication of success potential.
“The ones I’m betting on have either big money or unbelievable science behind it. The Ethereum project has a monster war chest and an unbelievable community. And with all these ERC20 tokens, it’s hard not to bet on them.
I also wouldn’t want to short the smartest guy on the planet…”
On the other hand, Michael also mentions that Ethereum, with this giant lead in the industry, still has a huge transition to make. It’s a toss-up right now and it’s difficult to predict which project comes out on top – “I don’t know how that will go. EOS, for example, might be the winner even though they receive so much criticism.
Predictions (Made on July 17, 2018)
- Multi-trillion market cap within a year
- Bitcoin value goes above 10K within a year
- “If we take out $6,800 we’re gonna go higher” – and we did!
- Michael on institutions coming in:“If they wait, they’re too late. In the next 2–4 years, the herd of institutions come rushing into this space.”
- “We’ll get a big announcement regarding a proper institutional custodian in the next 3 to 6 months”. This recently became a reality, read the article [here].
Watch the video highlight of Beyond Block’s exclusive interview with Michael Novogratz at Summit Seoul.