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Crypto investor Mike Novogratz told CNBC on Tuesday that bitcoin faces short-term uncertainty after falling below $ 30,000, but he maintained a positive long-term outlook.
Bitcoin has struggled over the past two months, having hit an all-time high in April of nearly $ 65,000. The weakness in recent days comes as reports said China has taken further steps to restrict bitcoin mining in the country and the country’s central bank pressured financial firms to limit offerings of related services. to cryptography.
“China has really been a lot more forceful in its idea of banning cryptocurrency. It has created deleveraging in the retail sector,” Novogratz said on “Squawk Box”. “A lot of the crypto is happening in Asia, a lot of it is focused on China. So we’re seeing some big sell-offs so it’s hard to call a bottom.”
“We’ll see if that holds up. We could dive below for a while and close above,” Novogratz said, referring to the $ 30,000 price point, which some technical analysts saw as a support level. key for bitcoin.
“If it’s really violated, $ 25,000 is the next big level of support. Listen, I’m less happy than with $ 60,000, but I’m not nervous,” added Novogratz, founder and CEO of Galaxy Digital , a group focused on cryptography. financial services firm.
Bitcoin on Tuesday was down more than 50% from its all-time high in April. The cryptocurrency has seen larger declines before, such as when it hit a record low of nearly $ 20,000 in December 2017, then lost over 80% of its value, falling below $ 3,500 per token.
Novogratz said he did not expect another crash of this magnitude.
“The ecosystem is so much more mature. The number of players moving in are so much more mature. Each bank is working on their own crypto project, how they can pass bitcoins to their wealthy clients,” Novogratz said. “I think a lot of customers who didn’t buy it the first time will see this as an opportunity to buy it and get involved.”
Some crypto trading platforms in Asia have allowed significant leverage ratios of up to 100 to 1, for example, noted Novogratz. The Chinese government’s crackdown on this kind of leverage is a long-term positive, he said. “Maybe not in the short term, but it’s a good thing,” he added. “That’s what created this excessive volatility that we’ve seen.”
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