Novogratz predicts $20,000 Bitcoin price as inflation gears up
- Novogratz has predicted that Bitcoin could be valued at $20,000 as too much dollar circulates.
- More money in circulation could spur an unprecedented rise in Bitcoin price.
- Investors are currently hedging Bitcoin in anticipation of a possible increase in the inflation rate.
Renowned investor and former Wall Street hedge fund manager, Mike Novogratz recently predicted that Bitcoin could break the $10,000 make and skyrocket to even $20,0000, going by current indices.
He also stated that the present digitalization of money is going on throughout the world, and China is currently leading the line in the currency digitalization front. As a result, the U.S. needs to speed things up to catch up with China.
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Towards the end of 2019, Bitcoin fell short in value. Novogratz made a forecast that the major cryptocurrency is likely going to finish the year stronger. He predicted that Bitcoin could rise to $12,000 before the end of the year.
However, he is predicting a more bullish outcome for Bitcoin. In a recent interview, he said there’s a possibility that Bitcoin could spur close to the $20,000 mark by the end of the year.
US Dollar still the dominant currency
He said the U.S. dollar will remain the dominant currency in the U.S. and Bitcoin cannot displace the currency any time soon. But he stated that people are looking to hold on gold and Bitcoin for the same reason. According to him, that is enough reason to engineer the upward movement of Bitcoin prices.
“Why are people buying Bitcoin? They are buying it because of the same reason they are buying gold,” he said.
He further said that Bitcoin has bounced back from its previous $5,000 price and it’s now being sold at close to $10,000. According to him, Gold and Bitcoin are now on high demand, which is likely going to increase the price.
More money in circulation could raise Bitcoin price
Novogratz also stated that there is an imbalance of fiscal stimulus as the Treasury and Fed are financing the economic effects of the COVID-19 pandemic. In his assertion, the Treasury is currently printing and buying too many dollars. As a result, an excess amount of USD is flooding the economy, which means the dollar could experience severe devaluation.
Now, people are hedging Bitcoin against the dollar to fight the adverse consequences of a devalued dollar. Novogratz added that he would be surprised if the $10,000 mark is not surpassed soon. He further stated that after Bitcoin breaks the $10,000 point, it could surge to $14,000, and head to $20,000 afterward.
More investors are hedging Bitcoin against inflation
Interestingly, Paul Tudor Jones III, another prominent hedge fund manager, and investor is reasoning in line with Novogratz. Paul believes that many investors are turning to Bitcoin as a hedge in this period of economic uncertainty. He also said he is buying the cryptocurrency to wedge against a possible inflation rate increase.
Novogratz also touched on moving into a financial system completely dominated by electronics transactions. He said currently, 95 percent of all transactions in China are carried out electronically. But the U.S. number is not close to that, which means the U.S. has some catching up to do.