Crypto investor Mike Novogratz told CNBC on Tuesday that Bitcoin faced short-term uncertainty after falling below $ 30,000, but it maintained its long-term positive outlook.
Bitcoin has struggled for the past two months after hitting an all-time high near $ 65,000 in April. The weakness of the past few days is due to reports that China took further steps to restrict bitcoin mining in the country and when the country’s central bank put pressure on financial firms to curtail crypto-related service offerings.
Bitcoin briefly turned positive just after noon ET. By early Tuesday it had turned negative for the year briefly as it fell below $ 29,000.
“We really had China much more forcefully in its idea of banning cryptocurrencies. That has created a debt reduction in the retail sector, ”Novogratz said on“ Squawk Box ”. “A lot of cryptocurrencies take place in Asia, many of them targeting China. So we’re seeing big liquidations, so it’s hard to call a low point. “
“We’ll see if it lasts that day. We could drop below and close above it for a while,” Novogratz said, referring to the $ 30,000 price level that some technical analysts saw as an important level of support for Bitcoin.
“If it really gets hurt, the next big level of support is $ 25,000. Look, I’m less happy than $ 60,000, but I’m not nervous,” added Novogratz, founder and CEO of Galaxy Digital, a crypto -focused, added financial services companies.
Bitcoin was down more than 50% on Tuesday from its all-time high from April. The cryptocurrency previously had major drawdowns, such as when it rose to a then record high near $ 20,000 in December 2017 and then lost more than 80% of its value and fell below $ 3,500 per token.
Novogratz said he did not expect another crash of this magnitude.
“The ecosystem is so much more mature. The number of players moving in is so much more mature. Every single bank is working on their own crypto project on how they can bring Bitcoin to their wealthy customers,” said Novogratz. “I think a lot of customers who didn’t buy it the first time will see this as an opportunity to buy it and get involved.”
For example, some crypto trading platforms in Asia have allowed large leverage ratios of up to 100 to 1, noted Novogratz. The Chinese government’s crackdown on this type of leverage is positive in the long term, he said. “Maybe not in the short term, but it’s a good thing,” he added. “That’s what caused this excessive volatility that we saw.”