Coinbase has fueled ‘a lot of frenzy’ and ‘that never ends well,’ bitcoin bull Novogratz tells MarketWatch

Wealthy investor Mike Novogratz speculates that bitcoin could be worth $100,000 by the end of 2021 and sees that value increasing five-fold by 2024, as the nascent crypto market continues to evolve and grow. But first, the industry may face a bit of near-term reckoning.

The CEO of Galaxy Digital
GLXY,
-16.84%

and prominent crypto proponent said that a lot of euphoria has been generated by the Coinbase
COIN,
+31.31%

IPO, but warned that the market could be in store for “a washout.” He pointed to the fervor for alt coins — or alternatives to bitcoin — such as dogecoin and XRP
XRPUSD,
+3.49%
,
the token running on the Ripple Labs protocol, ahead of Coinbase’s offering.

“In the next week, certainly we could have some volatility because of the excitement around Coinbase,” the former Goldman Sachs
GS,
+2.34%

partner said during the second week of an Investing in Crypto virtual event series hosted by MarketWatch and Barron’s on Wednesday.

“I’ve seen a lot of weird coins like dogecoin and even XRP have huge retail spikes, which means there’s a lot of frenzy right now,” Novogratz said. “That never ends well, and so we’ll probably have a washout at one point,” he said of the broader market.

That said, Novogratz remains bullish on bitcoin and Coinbase on the whole, and said he views the Coinbase IPO as “monumental” for the crypto industry.

Coinbase closed up more than 30% from its $250 reference price on Wednesday, at one point touching a market value above $100 billion. It closed at $328.28, off from its intraday peak at $429.54.

Ahead of the Coinbase listing, bitcoin
BTCUSD,
+0.87%

touched a record near $65,000 and dogecoin’s value surged to a record over 10 cents, representing a more than 20% daily surge for the digital asset that was created as a joke currency back in 2013 and has become a meme in the social-media community.

Meanwhile, XRP coins were up 88% so far this week.