Bitcoin tycoon Mike Novogratz breaks down how the pandemic accelerated the cryptocurrency revolution

Bitcoin bull Mike Novogratz explained how the coronavirus pandemic accelerated the "cryptocurrency revolution" during a Real Vision interview published Friday. 

"In five years from now, we are going to see 2020, as horrible as corona was, and lots of people have lost their lives...we are going to look back and in some weird way, this is going to have been a blessing for the cryptocurrency revolution," Novogratz said.

The Galaxy Digital CEO explained that two pandemic-induced trends propelled cryptocurrencies like Bitcoin and Ethereum to see 216% and 390% year-to-date returns, respectively.

Read more: BANK OF AMERICA: Buy these 26 cheap and fundamentally rock-solid stocks before the economic rebound sends them soaring in 2021

The first was the policy response to the global pandemic, specifically from the US government, Novogratz said. The Federal Reserve cut interest rates, loaned over $1.5 trillion to banks and financial institutions, and increased its purchases of US treasury securities in an effort to stabilize the economy when the pandemic struck. 

Novogratz added that "there could not be a better macro story," for owning bitcoin right now.  

The second trend that propelled cryptocurrencies? The expansion of digital life that may lead to more investors to feel comfortable using a digital wallet.

"This digitalization of everything— Zoom is part of our life now," Novogratz said. 

Read more: A hedge fund chief who oversees $2 billion breaks down why we're in for a 61% stock-market crash over the next 18-24 months — and shares 3 types of companies he's shorting right now

Other investors have also attributed crypto's 2020 boom to the macroeconomic backdrop that has developed over the course of the year. 

Earlier this month, former crypto skeptic and Bernstein Research's co-head of portfolio strategy Inigo Fraser-Jenkins told clients that the pandemic has changed the policy environment, debt levels, and diversification options for investors and made bitcoin an attractive asset.

The increased fiscal expansion and higher likelihood of inflation has sent investors who are looking for an inflation hedge and store of value to bitcoin.

Read more: The CIO of a new crypto fund that has returned 220% to investors this year explains why bitcoin topped $20,000 for the first time ever this week — and shares another digital currency set to become the 'asset of the year' in 2021

Sourse: businessinsider.com

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