In a recent interview, billionaire investor Mike Novogratz described how he first got into crypto.
Former hedge fund manager Novogratz is the Founder and CEO of Galaxy Digital, “a diversified financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sector.”
Novogratz’s comments came during an interview with Alex Saunders in episode E734 of the “Nugget’s News” crypto podcast.
The whole interview is highly recommended, but in this article, we focus on the story of how Novogratz first got into crypto in 2012.
Anyway, here is what Novogratz had to say about his first purchases of Bitcoin and Ether:
“I got a call from a friend of mine. He asked me about Bitcoin, and I had never heard of it. He had moved out to the west coast — everyone was talking about Bitcoin — and so, I did 15 minutes of research, and was like ‘ah cool tech technology, libertarians like it’…
“This was in 2012. We’re in the European financial crisis. The Chinese were buying … so my first buys of Bitcoin were at about $95, and they were very speculative. I bought it because I thought it would go up.
“And as I started looking at it, digging in, I thought this could be cool. So, I called a friend of mine — Dan Moorhead from Pantera [Capital] — whom I had invested with when he ran a macro fund a few years earlier. I helped seed his macro fund…
“I said ‘Morehead, take a look at this; I don’t have enough time.’ And after two weeks, he called me back, and said ‘Dude, this is going to change the world’… So we decided — Pete Briger, my other partner, myself, and Dan — that we would buy a bunch of Bitcoin and to Dan’s credit he bought a lot. We were a lot richer than Dan at the time, and so he bought a lot of Bitcoin — about thirty thousand bitcoin — for himself, and so we’re like ‘I’ll have $30,001’ because we couldn’t let him have more than we had; so we roughly all about the same.
“And [I] started taking it more seriously. I made the mistake of talking about it publicly. I say mistake because I didn’t know the press was there. The next day, I was in the cover of the Financial Times — the only time I was on the cover… Fortress’s Novogratz saying Bitcoin’s going to a $1000, and to me, it was pretty clear why I it was going to go from $100 to $1000, and it did. It went to like $1100, and then the Chinese put some restrictions on it… [it] went down to $200…
“And so, I actually wanted to sell it $1000. And that had been my plan… you make $30 million, you pay the tax, you buy, and you’re laughing for the rest of your life.
“My partner wouldn’t let me, and he was so mad at me he actually went and bought bitcoins for Fortress’s balance sheet, and all of a sudden, the company’s buying. I certainly as a principal can’t be selling… he’s like ‘I’m doing you a favor, this is gonna go so much higher, we don’t want to sell ever’…
“I left fortress in 2015. When you leave any company, you clean yourself off, and you look at your own portfolio…
“So I started looking… Joe Lubin was one of my college roommates, and he knew a lot about. And so I decided to go over to Brooklyn to see Lubin, and was just blown away by the fact that he actually had 25 people working for him. He had been a great friend for years… this is end of 2015, and he had just started Consensys…
“And he adjusted started consensus which is this ecosystem company and Joe was always a loner’s not the right work and he’s social but he always was doing a small project here small project he was way ahead of himself he wasn’t to longevity in 1988 now everyone’s talking on Chevy he was 33 years ahead of longevity he was into AI music in 1991, and so but he had never really put it all together and so to see him running a business in 25 people…
“And it was the first time I really understood the passion of this community, you know, Bitcoin had been a speculation in 2012-2014, and now I understood that this was really a decentralized revolution…
“I was so moved that I was like ‘Joe, how much faster could you grow Consensys if I gave you a bunch of money?’…
“I was at least intelligent enough to say, I’m not leaving until I buy some ether. Ether was trading [at] about 95 cents. It wasn’t easy to buy back then… So my first ether I actually bought from Vitalik. I called called him up. I met him once at a dinner. H didn’t remember me, didn’t know me, but they thought it was good for the community to have a Wall Street guy buying. So, I bought a half a million ether at 99 cents, or 98 cents; he changed the price at last minute from $0.98 to $0.99. I had waited too long, and the price was going up… And then, I really became much more of a crypto maniac.”
