Founder and CEO of Galaxy Digital Mike Novogratz, joins Yahoo Finance Live to discuss Bitcoin’s recent price action, his outlook on the crypto space and why he thinks every politician should try ayahuasca.
- We are back with Mike Novogratz of Galaxy Digital, the founder and CEO. Mike, you were just-- I was just talking you during the break, because you were just tweeting that you woke up at 2:00 AM today and started trading crypto. And it's not just Bitcoin you're looking at. You're looking at some of the other so-called alt coins that are out there. And there are a lot of them that had proliferated sort of in the last wave of cryptocurrency. What kind of opportunities are you seeing out there? I mean, and also, like, is this just for professionals? Or can people actually get burned really easily?
MIKE NOVOGRATZ: Listen, I think-- Bitcoin, I think, is for everyone. Everyone should put 2 to 3% of their net worth in Bitcoin, and look at it in five years, and it's going to be a whole lot more. I think Ethereum is also a coin that you can put into your portfolio. Ethereum will be the-- most likely the protocol that lots and lots of decentralized finance gets built on top of, the stable coins we were talking about. And so those are the two, I think, core coins.
Other than that, it really becomes a trickier game. You know, there was a giant rally in the last two days of many alt coins. They're lower-- lower volume, lower market cap, easy to squeeze. And so fun for professionals to trade, but can-- you can lose 60% of your money in a day. And so, you know, fair warning-- if you're going to play in those things, do it with small size and know what you're doing. For our institutional customers, it's almost all Bitcoin and Ethereum at this point.
- Mike, Janet Yellen is potential Treasury Secretary. Do you think she is bullish for Bitcoin and other crypto is? One of guys that-- she was dovish as Fed chairman, she'll slap dovish policies as Treasury Secretary, put pressure on the dollar, bullish on Bitcoin?
MIKE NOVOGRATZ: Yeah, listen, I think that the country's rich-poor gap, the country's productivity gap is going to require Janet Yellen to push for more stimulus and more stimulus. And so we've got a dove by nature and a social architect by nature. And so you're going to have a macro-- macro environment that's bullish for gold, bullish for Bitcoin, bullish for hard assets.
You know, her approach to Bitcoin as a financial asset for payments, you know, eight years ago wasn't that-- or five years ago, wasn't that constructive. But a lot has changed. So we're waiting to see what she says currently about crypto in general. But I think she's a dove for markets, which is good for Bitcoin and to be determined for Bitcoin specific.
- You know, Mike, thinking longer term, I guess, on the role of Bitcoin and digital currencies within society, you mentioned, you know, inequalities, these structural problems that we need to address as a country. And you also referenced, I guess, a view that will probably have a Fed coin of sorts, and China will have a digital currency. What role, I guess, does digital currencies play in trying to remake the economy as it's sort of become in the last couple of decades with all of the problems that we see all around us today?
MIKE NOVOGRATZ: Well, there are two examples that I'll give you. One is not as dramatic, but it's very important, right? Right now, if you want to take your money out of an ATM, they charge you 3.50 in a lot of places or 2.50. And so if you're taking 20 bucks out because you're not that wealthy, that's a monster tax, right?
We're going to go to a stable coin-based payment system. We'll see who wins that race. And that'll be free. You'll move money around for broadly free. In the same way long distance rates went for from $1 a minute to free, you're going to see money transfer, and the whole banking system get disrupted. And so that's important, because it's going to shift money back to consumers. It's not as revolutionary as what crypto can be.
What's more revolutionary is we're going to come to systems where the users can participate. Imagine Uber, if when Uber started, the riders, the drivers, the engineers all got tokens, all got ownership of the thing instead of just venture capital and the founders. And so, listen, Uber is a spectacular company that's worth-- I don't even know what it's worth anymore-- you know, tens of billions of dollars-- has made a few people stunningly rich.
You can create systems where that gets shared. Where the drivers who actually created Uber and the riders who actually created Uber own a small piece of that equity, because they keep some of the tokens. And so those-- we haven't really seen that yet. We're seeing it first in the centralized finance. Some of the D5 projects like a Uniswap or YFI, where the users end up getting ownership are interesting. I will call them sandbox examples of what the future might be.
What's fascinating about crypto is you've got Bitcoin as kind of a finished product. And everything else is this giant sandbox that's being created for the future. So it's a real big venture bet. But it's fascinating, because at the core of it is this revolutionary spirit, which is transparent and egalitarian.
- And Mike, just to end on something that is not crypto, I want to ask you about politics for a minute, because I know that you were involved in some active campaigns to defeat President Trump's re-election campaign. And now it looks like he is finally letting the transition happen. What's next? What's your-- you know, there was a lot of energy, a lot of money being thrown at that effort not just by yourself, but by a host of different people. Where are you going to put your energies now that he is headed out of office?
MIKE NOVOGRATZ: Listen, I think the Georgia Senate race is important in lots of ways. You know, it's funny-- the market likes this current result of a split government, right? And every rich friend I know-- Democrat and Republican-- likes this split government. I'm worried that status quo doesn't help. Even if you take away Trump's chaos and Trump's bad-- you know, bad energy, you still have a rich-poor gap that is accelerating, not decelerating. And so I would rather the Senate go 50/50. It'll still be a conservative Senate if it's 50-50. And so we're pushing pretty hard down in Florida. We've got a campaign called Win Both-- Win Both Seats to try to push the Senate to the Democratic hands. Because I think that would give Biden a chance to at least enact some policy. You're not going to get crazy tax policies. You're not going to get real progressive policies. A, Biden is not a progressive, and B, the Senate-- the Senate is conservative. Even if it's a 50-50, it's not going to be a radical Senate. But I do think having Mitch McConnell with kind of veto power of the president's agenda is not a great thing. So that's where my focus is right now.
- Gotcha. Mike Novogratz. Maybe also one of your other investments, which is psychedelics-- maybe that can be brought to play to treat some of the politicians out there, to change their perspective.
MIKE NOVOGRATZ: When I finished an ayahuasca week, I learned thought about this carefully, and I think every politician in the country, in the world should have to do one week of ayahuasca. They'll learn something about themselves.
- I'm quite sure that they will. Mike Novogratz, thank you so much for being here. Always really fascinating to get your perspective. Next time, we're going to talk much more about your investment in psychedelics. But that's all we have time for today. Mike Novogratz, come back and see us soon. Founder and CEO of Galaxy Digital. Thank you.
- Thanks, guys.