Bitcoin bull who sees price hitting $500,000 is bullish on Biden's expected SEC pick

Brian Sozzi
·Executive Editor
·3 min read

Bitcoin bull Mike Novogratz of Galaxy Digital thinks his former colleague at Goldman Sachs Gary Gensler would be a friend to the crypto space if he goes on to be chosen as the next chief of the U.S. Securities and Exchange Commission (SEC), as new reports suggest.

“I worked with Gary at Goldman Sachs in Hong Kong way back in the 1990s. He is wildly smart. He has taught a class at M.I.T. on blockchain and bitcoin. So he understands the space. He likes the space,” Novogratz told Yahoo Finance Live.

That take may come as a surprise to some market watchers given Gensler’s reputation on Wall Street.

Gensler is known for his no nonsense approach as the chair of the Commodity Futures Trading Commission (CFTC) from 2009 to 2014. Despite his Goldman pedigree, Gensler enacted robust new swaps trading rules as mandated by Congress in the wake of the Great Recession.

And while he has a thorough understanding of crypto and blockchain, he hasn’t been shy in hinting cryptocurrency ripple should be classified as a security (which is not bullish for crypto faithful).

Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler testifies on Capitol Hill in Washington, Tuesday, July 30, 2013, before the Senate Banking Committee as lawmakers examine how to mitigate systemic risk in financial markets through Wall Street reforms. (AP Photo/J. Scott Applewhite)
Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler testifies on Capitol Hill in Washington, Tuesday, July 30, 2013, before the Senate Banking Committee as lawmakers examine how to mitigate systemic risk in financial markets through Wall Street reforms. (AP Photo/J. Scott Applewhite)

Nevertheless, the gazillion dollar question is if Gensler is appointed and confirmed would he be supportive of bitcoin ETFs? Remember, the SEC has a history of shooting down applications to create bitcoin ETFs on the grounds of high potential for fraudulent activity and market manipulation. BTIG crypto analyst Mark Palmer recently noted in one day alone in August 2018 the SEC rejected nine bitcoin ETF applications.

Palmer goes onto say that bitcoin’s stunning advance to above $40,000 these past few months fueled by the arrival of institutional buying could finally change sentiment inside of the SEC on ETFs.

In December, insurance giant MassMutual unveiled a $100 million investment in bitcoin for its general investment account. PayPal continues to buy up bitcoin to support the launch of the capability to buy, sell and trade cryptocurrency from a PayPal account. And Square recently said it will allow customers for the first time to receive bitcoin back on transactions, a move that triggers the payments platform to buy more bitcoin.

Novogratz — who is on the record predicting bitcoin prices will rise to $500,000 by 2024 — thinks a Gensler-led SEC could sign off on a bitcoin ETF within the next year. He believes whoever leads the SEC will give an ETF clearance, however.

“I think whoever gets the space will be supportive of a bitcoin ETF. So I think you will see a bitcoin ETF come soon. What is soon? It’s probably within the year,” said Novogratz.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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