ICO News: Ex-Hedgie Likens Cryptocurrency Projects to Ponzi’s
Ex-hedge fund manager Michael Novogratz believes that cryptocurrencies are the biggest bubble of our generation. He made the remarks this week at the Coindesk Consensus conference in New York on the heels of making headlines days before when he called for USD 40,000 bitcoin by year-end 2018. Novogratz, who is in the process of launching a digital assets fund, and his new firm, Galaxy Investment Partners, appear to be sifting through the upcoming ICOs.
“To be fair, this is a bubble and there’s a lot of fraud mixed in. We look at tons of projects. And some get funded, and they literally look like Ponzi’s. There’s a lot of froth and fraud in something that’s exciting as this,” Novogratz said.
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Novogratz is no stranger to cryptocurrencies and ICOs, and he sits on the advisory board of blockchain-based startup AirSwap, an Ethereum-based decentralized platform for token trading. The AirSwap ICO was a blockbuster deal, having sold 150 million AST tokens for about 119,000 ETH or USD 36 million.
Hedge Funds and Upcoming ICOs
Hedge fund traders are showing increasing interest in the cryptocurrency trade, evidenced by another new fund dedicated to cryptocurrencies and blockchain technology. Michael Arrington, the founder of Silicon Valley blog TechCrunch, has 10% of his personal net worth tied up in cryptocurrencies, according to his blog. That exposure is poised to rise now that he is launching Arrington XRP Capital, a hedge fund that will be denominated in Ripple’s XRP coin.
He has reportedly already attracted half of his USD 100 million goal to his coffers. The fund will invest in upcoming ICOs although the primary focus is on existing coins and some traditional institutional investments.
While there is persistent talk of a bubble in cryptocurrencies, and with good reason given the ballooning of valuations over the past year to an industry market cap that recently crossed the USD 300 billion threshold, Arrington isn’t going anywhere. He has vowed to spend the balance of his career in cryptocurrencies. He will certainly have his pick of upcoming ICOs, and his tech savvy should help him to choose the most promising projects.