Legendary trader and prominent bitcoin bull Mike Novogratz said that he does not believe that the litecoin price will sustain its dramatic early-week rally and he would “sell it here.”
Speaking with CNBC, Novogratz — the founder of crypto hedge fund Galaxy Investment Partners — stated that although he believes bitcoin represents a buying opportunity for investors even after its fourth-quarter rally, he does not think that litecoin offers the same upside.
“I don’t think [the litecoin rally] has the same legs as bitcoin,” he said. “I’d sell it here” and buy bitcoin.
Over the course of the past week, the litecoin price has more than tripled, and on cryptocurrency exchange GDAX it briefly crossed $400. At present, the litecoin price is trading at a global average of $336, making it the fifth-largest cryptocurrency by total market cap.
Novogratz attributed the rally to an “agile promoter” — presumably Litecoin creator Charlie Lee, who has made several high-profile media appearances this week — and hype around lightning network technology, which is expected to be integrated into both Bitcoin and Litecoin.
Another theory is that Coinbase users, many of whom are new to the cryptocurrency markets, are buying litecoin because it appears “cheap” compared to bitcoin and ethereum, the other two cryptocurrencies offered on the brokerage platform.
Novogratz said that rallies such as litecoin’s are a byproduct of the industry’s “speculative mania,” as well as the fact that none of the protocols — not even Bitcoin — are ready for “prime time.”
“This is what a speculative mania feels like. We are in the middle of a speculative mania, and phase one of this whole decentralized revolution is just selling the story. None of these protocols are going to be ready for prime time for at least two to three years, so we’re selling the story of what the future is going to be,” he said.
Of course, Novogratz is quick to admit that his bets have been wrong before. Although he called bitcoin’s ascent to $10,000, he believed that achievement would trigger a selloff. Consequently, he sold some of his holdings, waiting to buy back in following a dip that never came.
“Cost me a fortune,” he said.
Featured image from Bloomberg.
Last modified: May 20, 2020 9:16 PM UTC