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Bitcoin’s [BTC] value rises with emergence of new altcoins, claims Galaxy Digital’s Mike Novogratz

Biraajmaan Tamuly



Bitcoin's [BTC] value rises with emergence of new altcoins, claims Galaxy Digital's Mike Novogratz
Source: Pixabay

In a recent interview with CNBC Television, Mike Novogratz, notable Bitcoin [BTC] influencer, listed out how the situation for Bitcoin [BTC] had changed over the last two years and how the introduction of new altcoins affected its valuation.

On the show, Novogratz was asked whether new emerging coins posed any threat to Bitcoin [BTC] in terms of valuation and popularity. Novogratz explained that back in 2017, every virtual asset in existence proclaimed to be the next big virtual currency. In response, an enormous supply was created collectively. The limited 21 million BTC did not matter since there were so many other options. This eventually led to the collapse in price as many altcoin projects flustered.

In the current situation, the validity of different coins had more clarity and Bitcoin [BTC] prevailed as the popular store of value. He emphasized that in this particular space, nobody else stood a chance as Bitcoin [BTC] was in itself, a complete project. It did not need to relatively improve more than other coins since it had already established its superiority.

He added that new institution-backed crypto assets (e.g., JP Morgan coin) currently entering the market actually helped the value of Bitcoin [BTC] for “there was no competition in their lane.”

Additionally, Novogratz added that people should be investing only 2-3 percent of their net worth in Bitcoin. He said,

“You should only invest the amount of money that you can afford in Bitcoin.”

Mike Novogratz also believes that it is incredible how quickly Bitcoin evolved in the last 10 and half years, as people had created something that was worth more than $140 billion in market value, at press time.

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Biraajmaan is an engineering graduate who is exploring the ever-changing crypto verse while traversing his passion for cryptocurrency news writing. He is a Chelsea fan and a part-time poet and does not hold any value in cryptocurrencies yet.


JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise




JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.

A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.

Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.

Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.

Source: Bloomberg

It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.

Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.

The analyst added:

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.

Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:

“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”

Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.

This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.

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