Galaxy Digital founder Mike Novogratz provided significant insights to investors during the third-quarter earnings call on Nov. 9, highlighting the likely increase in institutional adoption of cryptocurrencies in 2024. He emphasized the pending approval of Bitcoin (BTC) spot exchange-traded funds (ETFs) as the primary driving factor behind this projected surge in institutional investment.
Novogratz expressed the firm’s stance that the approval of several ETFs is now not a matter of if but when. Galaxy Digital filed its spot Bitcoin and Ether (ETH) ETF applications with the United States Securities and Exchange Commission in partnership with Invesco in Q3 2023. The positive sentiment among investors is evidenced by a bullish turn in November 2023, with prominent ETF research analysts predicting the SEC will have approved 12 major Bitcoin spot ETF applications by January 2024.
“2024 literally is going to be a year of institutional adoption, primarily first through the Bitcoin ETF, which will be followed by an Ethereum ETF,” said Novogratz during the Q3 earnings call, depicting the major shift expected in the investment landscape. He also highlighted that 2025 could see institutional investment reach a tipping point, especially in terms of investments in tokenization and wallets. Additionally, Novogratz emphasized the importance of ensuring that dollar-backed stablecoins remain a central cog in the wider cryptocurrency ecosystem.
Novogratz believes that the introduction of a Bitcoin ETF will bring a measure of institutional confidence and a significant amount of funding to the cryptocurrency space. “This ETF is giving us all breathing space, putting life in the system. That brings in capital that allows the rest of the stuff to flourish. But I think if you look at the crypto long-term plan, it’s on target,” he added.
During the call, the potential influence of an Ether spot ETF was also brought up, with Novogratz stating that its possible approval might not be as well received as a Bitcoin ETF, given Ethereum’s validating model being based on a staking model and staking yields. He elaborated that unless they can figure out an ETF that actually passes through the staking rewards, it will be kind of a subpar product from just owning Ethereum with someone like them and having it staked. The technical differences are significant if investors were looking at yields between 4% and 7%, depending on the method of staking. Novogratz stressed the importance of utility and sustainability, with different blockchains and their native tokens needing to serve a purpose and have stuff built on them to sustain long-term value.
In conclusion, Novogratz’s insights indicate that the cryptocurrency market is poised for a significant shift in 2024, with a focus on institutional adoption driven by the imminent approval of Bitcoin spot ETFs. This realization reflects a growing sense of optimism within the market and sets the stage for a major transformation in cryptocurrency investment.