
Novogratz Halts Hedge Fund, Says Bitcoin May Drop to $8,000 - pdog
https://www.bloomberg.com/news/articles/2017-12-22/novogratz-shelves-hedge-fund-sees-bitcoin-dropping-to-8-000
======
jpmattia
For comparison, he also thinks it's going to $40K by EOY 2018.

[http://www.businessinsider.com/novogratz-bitcoin-could-be-
at...](http://www.businessinsider.com/novogratz-bitcoin-could-be-at-40000-by-
end-of-next-year-2017-11)

~~~
JumpCrisscross
For further comparison, he ran an $8 billion fund that utterly failed to
weather the 2008 financial crisis [1]. Prior to the IPO, he and Fortress'
management "borrowed money, used $250 million of it to pay themselves a
dividend, and used part of the I.P.O. proceeds to pay back the loan."

[1] [https://www.vanityfair.com/news/2009/04/fortress-
group200904...](https://www.vanityfair.com/news/2009/04/fortress-
group200904-2)

~~~
hisabness
paying yourself with borrowed money sounds good to me. as along as its not
recourse that is...

~~~
rlucas
Old trick among big-money managers ... the other fun piece about giving
yourself a questionably-recourse (or questionably-to-ever-actually-be-
collected) loan is that it's not taxable until it's forgiven. But it's still
plenty spendable before that!

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omarforgotpwd
How the fuck is some guy, or anyone for that matter supposed to know where the
Bitcoin price is going to go? Yeah it could go to 1,000 or even 100... it
could also go to 100,000 by next month. There are so many factors at play it’s
extremely difficult to make a prediction with a high degree of confidence. If
this guy thinks it’s going to drop to $8000 just because the price fell 20% in
one day he must be new to this. There have been many many cases where the
price dropped like crazy and then picked back up within no time.

~~~
jondubois
By making the prediction, it can become a self-fulfilling prophecy.

He is probably just trying to make the price drop more so that he can buy even
more Bitcoin.

The end of the year is often a time when people get together... Bitcoin is
bound to come up in conversations. So I think that there might actually be a
big rise in interest after Christmas.

~~~
madaxe_again
The last few days have been delightful for longer term holders - it’s just
been wave after wave of panic selling, with everybody seemingly forgetting
that there are futures contracts out there for Jan delivery at $16k+.

I think what we’ve just seen is a bit of a forced sell off, to drive the price
down before the next big speculative bubble, which will likely mirror the one
after thanksgiving.

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comboy
I refuse to believe that he didn't anticipate this given how insanely it was
going up lately. I'm surprised he haven't bought back yet and wants it to go
lower. It totally could though. Just 2 months ago $10k for Christmas sounded
_very_ optimistic.

~~~
jacquesm
> Just 2 months ago $10k for Christmas sounded very optimistic.

Who knows, it might still be very optimistic today.

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etherwhitelable
This is typical bullcrap from Wall Street. I think its going down but I also
think its going up...if it doesnt drop in 4 months he can claim to be a sage.
If it drops he can be a right that way too. What Novo is being indecisive and
wishy washy.

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dahdum
Hedge funds can short too, why the cold feet all of a sudden?

My guess is he's shorting the markets or couldn't raise the capital after all.
Or ultimately thought the risk to his reputation if his fund failed was too
high.

~~~
bob_theslob646
It's different shorting when you have to put up so much capital to short all
at once. To give you an idea, on future exchanges in the United States, you
have to put up a 90% maintenance margin, compared to other commodities that
allow you to maintain 40%.

Options not being written is another factor.

>Getting cold feet ? I bet it's not easy raising money when the asset you are
trading falls 40% in two days.

~~~
dahdum
If he knew it would and cashed in on that capital would come quickly. From the
article I see part of it was regulatory burden and propriety of trading his
own crypto while maintaining the fund. That makes sense but nothing to do with
the current drop, good excuse though.

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bobcat9
Sounds like they forgot it's a volatile market where 30% drops are the norm.

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sna1l
[http://www.zerohedge.com/news/2017-12-22/mike-novogratz-
dela...](http://www.zerohedge.com/news/2017-12-22/mike-novogratz-delays-
crypto-hedge-fund-launch-warns-bitcoins-going-8000) \-- Funny that the price
went up after his announcement. Correlation not causation, but ironic
nonetheless.

~~~
thisisit
The way Novogratz talks in the interview embedded in the ZH post:

[https://www.cnbc.com/video/2017/12/12/the-man-who-called-
the...](https://www.cnbc.com/video/2017/12/12/the-man-who-called-the-bitcoin-
rally-sees-this-for-litecoin.html)

is really weird. People might disagree with me but I think he comes off as
unreliable.

------
vasilipupkin
Yeah, this seems like weird erratic behavior. I mean if you are raising a big
fund for bitcoin and you think it's going to drop, that's good for yoi because
you can buy it cheaper. And if you are not a bitcoin bull, why raise a fund in
the first place? Something is up with this guy

~~~
iwcmarkxviii
Actually not that erratic. he doesn't have enough stake in BTC or ETH to make
massive market movements. he's wants to drive the price down to buy more and
the only way is through his position of "influence."

BTC will make a massive rebound in 2018. I'm sure a lot of BTC bulls have full
knowledge of this possibility and are acquiring as many as possible.

~~~
659087
> BTC _will_ make a massive rebound in 2018

...

> I'm sure a lot of BTC bulls have full knowledge of this _possibility_

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kjrose
So basically he’s saying that there is no legitimate way to apply a value to
bitcoin so the price could be worth 100 or a million a bitcoin.

Which is correct since the value of it is mostly driven by speculation right
now. There’s no telling how much it will swing.

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baq
or $800... it's a crazy market.

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banku_brougham
I want to know what platform someone like him can use to transact $250MM out
of Bitcoin into USD (in his personal trading acount he said, actually $250MM
was the profit).

As I understand, its not easy to convert to cash, especially in large volume.

~~~
659087
I'm sure Bitfinex would happily give him some "USD"* for it, just as soon as
they fire the printing press up again.

* Internet monopoly money

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iagooar
Good time to buy if it drops to that price. EOY 2018 Bitcoin could be worth
10x that.

~~~
kbwt
Could also be worth 100x less.

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tw1010
N=1 data point says thing about stock, quick, let's all sell

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mmgutz
It was at $10.5K this morning. It bounced back to after yesterday's global
dip. Don't think it's dipping to $8K.

------
0x445442
And if it went to $8K today it would be up ~1000% over the last 12 months.

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johnwheeler
oooh soothsayer, tell me what you see

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mutteraloo
It could also go back to $100.

Bitcoin has no mainstream use right now. It's too expensive to transact in
terms of money and time, it's too volatile to be a store of value, it's too
technical to be used casually, it's too fragile since it gets hacked every
which way, and it's too easily copied to be rare.

~~~
Snackchez
>Being hacked every which way

Do you want to clarify this? If you meant what I think you meant, you're
incorrect.

~~~
s0rce
I assume he meant people have had their coins stolen, usually from exchanges,
really not much different than your bank getting robbed, although in this
cause your money is gone and the exchange doesn't cover the theft.

~~~
jandrese
There is no FDIC for Bitcoin exchanges. Also a distressingly large percentage
of the exchanges to date have been either fraudulently or incompetently run
and lost the user's bitcoibs and/or fiat money.

Nobody would use banks if 4 out of 5 were completely cleaned out by crooks and
went out of business.

~~~
solotronics
yes there is. Gemini is FDIC insured for dollar deposits
[https://gemini24.zendesk.com/hc/en-
us/articles/205823016-Are...](https://gemini24.zendesk.com/hc/en-
us/articles/205823016-Are-my-funds-FDIC-insured-)

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arisAlexis
and because he says it, its the truth and finally HN can say I told you so
it's a bubble!

