Year-to-date, the Bitcoin price has climbed from $6,854 to $10,552, recording a staggering 54 percent increase in less than three months.
Liquidity will continue to drive bitcoin
When asked about the key factor behind the upsurge of bitcoin, Novogratz noted that the injection of liquidity into the global financial market has been an important component of the cryptocurrency market’s rising momentum.
The U.S., Europe, and other regions alongside China have increased liquidity in markets especially during the latter half of 2019 as a response to rising geopolitical risks.
Over the upcoming weeks, China is set to inject even more liquidity into the local market as fears of coronavirus have negatively affected productivity and economic growth.
The Bitcoin price is up more than 50 percent since January 1 (source: tradingview.com)
As that happens, the demand for Bitcoin and crypto, in general, could continue to rise, said Novogratz.
“Liquidity, liquidity, liquidity. We’ve got global rates low, people pumping in money, you look at China and you do an aerial view, nothing’s moving in China, which means the government is getting ready for two barrels of liquidity. So it’s driving stocks, it’s driving crypto, it’s driving gold.”
In the past, Novogratz explained that accredited investors, institutions, and fund managers were uncertain about bitcoin and its value proposition.
The dominant cryptocurrency has matured with improving infrastructure and growing mainstream awareness to the point in which Novogratz said he now describes bitcoin as an essential part of a fund’s macro portfolio.