Sohn conference: Novogratz on what next for crypto after bitcoin euphoria

Bitcoin’s ascent past $US93,000 this week shows its coming out of ‘regulatory purgatory’ and on the cusp of bigger, better things, according to billionaire believer Mike Novogratz.

Bitcoin is the ‘gateway drug’ for the cryptocurrency industry, which is now seeing the end of its time in ‘regulatory purgatory’, says one of the sector’s strongest billionaire backers and former Kamala Harris campers.

Galaxy Digital chief executive Mike Novogratz, a former Goldman Sachs and Fortress Investment Group partner, is predicting huge innovation in the blockchain space in the next five years as companies focus on further intensive decentralisation.

Mr Novogratz spoke virtually with Coinbase’s country director John O’Loghlen at the Sohn Hearts & Minds conference in Adelaide on Friday, days after tipping a jump in bitcoin’s price to $US100,000 by December.

After hitting a high above $US93,000 earlier this week as part of the Trump trade rally, the cryptocurrency market leader is now just above $US88,000.

“We always talk about bitcoin because it drives people into the space. And once they are in this space, they then start learning about what else is going on.

“And so it’s like the gateway drug for the people and I think it’s gonna be the story that you hear more than the rest of the digital assets for the next six months.”

But there’s more to come.

“I got into this space not just because of bitcoin, but because I really believed that we would lay a new foundation for financial and consumer markets based on blockchains – peer to peer, transparent, less friction, less costs, cut out the middlemen.

“That hasn’t happened per se in a big way. So besides bitcoin, payments has been a huge, huge business.”

He said stablecoins, whose value is pegged to another currency, commodity, or financial instrument, and payments are going to be “the next big story”.

“But the rest … decentralised ticketing, decentralised finance, decentralised ride-share, decentralised social media … hasn’t really happened.”

He is hoping with the regulatory relaxation and clarity, more projects start building on blockchains with faster technology and renewed trust so people are no longer scared to use them.

A blockchain is a decentralised ledger of all transactions across a peer-to-peer network.

In the next five years, he predicted huge innovation and potential consolidation, but couldn’t pick any winners from the current crop of blockchain networks, including Ethereum, Solana or Celestia, saying it would be a ‘battle royale in the next few years’.

The vocal opponent of Donald Trump “for a lot of different reasons” prior to the elections said the US would soon get a suite of top pro-cryto regulators.

The crypto industry’s excited about a resurgence under President-elect Donald Trump’s administration. Picture: Jon Cherry/AFP

“I woke up and said ‘wow, this is going to make my business more fun. It’s going to be an exciting few years’.”

The first piece of legislation the US needed to focus on was stablecoins, he said, ruling out the possibility of a US central bank-issued digital currency under a Trump-led administration.

“I literally believe in privacy and I don’t want the government really controlling, knowing exactly where my money’s spent … I also understand the national security implications of, you know, currencies.

“And so my sense is, you’re gonna get some legislation that allows private companies to issue stablecoins backed by treasuries.

“As people go from stuffing 100 dollar bills in pillowcases in Nigeria or Pakistan … in digital versions, America is gonna want digital dollars.”

Tether dominates the stablecoins business with USDC a distant second.

On the rising popularity of meme-coins, including Elon Musk-backed Doge, he said young people like his son loved to speculate in what he described as a ‘gambling arena’

“We allow sports gambling, we allow the lottery, like why in God’s name won’t we allow meme-coin gambling.”

Meme-coins are cryptocurrencies named after characters, individuals, animals, artwork, etc.

“And when I say gambling, they’re betting that the meme is gonna catch fire, right? They’re betting that their sense of humour is gonna be in touch with everyone else sense of humour.

“You have to be okay with the fact that there is no purpose other than gambling joy.”