'Coins Like DOGE and XRP Spike' Says Mike Novogratz, Predicting a Crypto Market 'Washout'

In a recent interview for Barron's and Marketwatch's "Investing in Crypto" virtual event series, Bitcoin bull and billionaire investor Mike Novogratz warned about cryptocurrency market volatility. Novogratz believes that bitcoin and companies like Coinbase will continue to thrive in the long run.

Novogratz Predicts a Crypto Market 'Washout'

Coinbase Global, Inc. shares are currently down 5% since yesterday's opening, and billionaire Mike Novogratz spoke about the San Francisco firm and the crypto-economy in general during the launch. Novogratz has long been a supporter of bitcoin (BTC) and other digital assets such as ethereum (ETH). Galaxy Digital, the crypto investment firm he founded, recently filed an application with the Securities and Exchange Commission (SEC) to list a bitcoin exchange-traded fund.

While speaking positively about the COIN launch on Wednesday, Novogratz predicted that the excitement would cause some volatility in the crypto market. “Certainly, we could have some volatility in the next week because of the excitement around Coinbase,” the former Fortress executive said in an interview with Marketwatch. Despite recent statements on CNBC in which he stated that he is "feeling bullish about the crypto economy," Novogratz sees a shakeup.

When he said about XRP and Dogecoin, he was referring to them.

"I've seen a lot of strange coins, like dogecoin and even XRP, have huge retail spikes, indicating that there's a lot of frenzy going on right now. That never ends well, and we'll almost certainly have a washout at some point."

Novogratz regards Coinbase's IPO as "monumental." Exec of a Crypto Exchange Sees a 40% Chance of Bitcoin Prices Reaching $70,000 by the End of May

Dogecoin (DOGE) and XRP have both seen massive gains in the last seven days. At the time of recording, XRP has gained +64.61 percent in seven days, while dogecoin has gained +114.15 percent in seven days. In terms of launching COIN shares, Novogratz emphasised that the Coinbase IPO was “monumental” for the industry.

Pankaj Balani, CEO of Delta Exchange, indicates that his short-term outlook following the COIN listing is far more optimistic than Novogratz's.

“Coinbase opened just under the $100 billion valuation mark, but it failed to sustain the initial gains and closed about 15% lower than the open price,” said Balani. “There have been some concerns about the company's valuation, given the volatility in its earnings, but that does not diminish the fact that it has the largest market share among regulated centralised exchanges in the United States, and its business is close to a monopoly at this point,” the crypto derivatives exchange CEO added.

According to Delta Exchange's Balani, there is a 40% chance that bitcoin (BTC) prices will reach $70,000 per unit by the end of May.

“The next few trading sessions will determine how new investors view the stock and the sector,” Balani said. “Crypto investors are also keeping a close eye on the COIN price, which has become a proxy for traditional investors' interest in the crypto space. We saw Bitcoin correct in the aftermath of COIN's lukewarm listing, but it maintained its monthly gains and the critical $61,000 levels. The options market is currently pricing a 40% chance of BTC reaching $70,000 by the end of May, indicating that sentiment remains strong,” Balani concluded.