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Galaxy Digital CEO Mike Novogratz Admits He Was Wrong About XRP and Altcoins

Mike Novogratz, the Founder and CEO of Galaxy Digital, acknowledged in an interview that his initial skepticism about XRP was unfounded. He admitted that he was wrong in his assessment of XRP, citing concerns about its distribution, particularly the significant ownership of the coin by Ripple Labs, its creator and issuer. Novogratz expressed a change of perspective, stating that he had been mistaken in his earlier belief that the distribution model was unlikely to succeed. Additionally, he noted that, at present, altcoins serve as a store of value and may potentially offer utilities in the future.

Wrong About XRP and Altcoins

Novogratz remarked, “Ripple has evolved into an institution, and the presence of the XRP Army is undeniable; they exhibit genuine concern for their ecosystem and the well-being of their coin.” He emphasized that Ripple’s XRP indeed serves a practical purpose, although its overarching use case aligns closely with that of Bitcoin, acting as an alternative for individuals seeking a means to store value.

When reflecting on the 2023 cryptocurrency market and the annual gains of major players like Bitcoin, Ethereum, and various altcoins, Novogratz characterized all altcoins as essentially “a form of Bitcoin.” He asserted that the primary value proposition for most altcoins lies in their role as a store of value. Investors, according to Novogratz, are drawn to these digital assets with the belief that they will not only retain their value but potentially appreciate over an extended period.

Novogratz reflected on his previous perspective, stating, “I used to assert that among the 114 elements on the periodic table, gold was the sole one endowed with intrinsic value, while the rest required utility.” He admitted, “I believed Bitcoin could derive value solely as a store of value, and that Ethereum and other cryptocurrencies needed practical use cases.”

However, he admitted his error, stating, “Where I miscalculated is that, in essence, all these cryptocurrencies have become, to some extent, a variation of Bitcoin.” Novogratz pointed out that the rise of ETFs and the influx of new investments are providing a temporal buffer, allowing time for potential utilities to materialize in the future. Nevertheless, he emphasized that the predominant value in cryptocurrencies like Solana, Ethereum, or Dogecoin currently resides in their role as a store of value.

The Narrative Game of Crypto Market

Novogratz succinctly characterized the present state of the cryptocurrency market as a “narrative game,” wherein companies and issuers function as storytellers, weaving narratives to entice both consumers and investors. However, he anticipated a shift in the future towards establishing a more robust financial market, accompanied by the development of comprehensive regulatory infrastructure. This transformation reflects a move away from the current emphasis on narratives toward a more mature and regulated financial landscape in the cryptocurrency industry.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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