Billionaire Michael Novogratz has bet a third of his fortune in cryptocurrencies. The recent slump in cryptocurrency markets, notwithstanding, he is still bullish on them. In an interview with Bloomberg, Novogratz likened bitcoin to “digital gold”. “That means it’s the only one of the coins out there that gets to be a legal pyramid scheme. Just like gold is,” he explained. 

Novogratz’s Galaxy Capital, which is partly owned by Galaxy Digital Holdings Ltd. – a holding vehicle listed on the Toronto Stock Exchange, reported losses of $136 million in nine months after making bets on bitcoin, Ethereum’s ether, and Ripple’s XRP. The three coins have depreciated significantly in value this year. Bitcoin is down by more than 75% while ether and XRP have shed more than 90% of their prices. The firm has blamed trading volumes in cryptocurrencies as a headwind. 

In the Bloomberg interview, Novogratz said he expected bitcoin to stay at the $6,200 price level. (Bitcoin entered that price range in June this year). But a confluence of events last month upset his calculations. First, Bitcoin Cash forked and crypto markets went into a tailspin. Then the SEC cracked down on suspect ICO tokens and added to the negative news cycle. “That scared the heck out of a lot of people,” he says about the latter event. 

Novogratz expects Galaxy Capital to break even or, at least, make money next year. His strategy for Galaxy Capital has not changed “as dramatically as one would think.” “We’re not nervous; we’re frustrated that our investors have lost money. We’ve got plenty of cash to run the business for a long time,” he said. According to him, bitcoin’s steep ascent last year was a drug. “When you’re in the speculative mania, testosterone is boiling over and there’s a lot of greed,” he said. The drug’s effects have worn off and the market’s investors are sober now. Novogratz said the firm was preparing itself to become the Laird Hamilton (a big wave surfer) of crypto for the next boom in markets.