KEY POINTS

  • Mike Novogratz said more companies will follow Tesla's lead and buy Bitcoin
  • He said what connects Tesla and Bitcoin is the younger generation
  • Tesla invested $1.5 billion in Bitcoin

Bitcoin could hit $100,000 by the end of this year as more companies come forward to buy the dominant cryptocurrency following Tesla's lead, said Mike Novogratz, the founder of Galaxy Digital.

In an interview with Bloomberg, Novogratz said the price of Bitcoin will continue to increase because more institutions and corporations will be adding the cryptocurrency in their portfolios or balance sheets. This can be done by putting excess cash into Bitcoin and then moving them into reserves. 

This increase in corporate and institutional inflow is made possible by Elon Musk and his company Tesla. The company on Monday said it bought $1.5 billion worth of Bitcoin. "You got the biggest, the wealthiest man in the world and one of the biggest stories doing it. You've got to think other CFOs and CEOs are saying, what should we be doing?" Novogratz said. 

Tesla made the announcement in a filing with the Securities and Exchange Commission (SEC), stating that it purchased Bitcoin to give the company more flexibility and to maximize its cash flow. The company also announced it will soon accept Bitcoin as payment for its products. 

Rumors about Tesla buying Bitcoin was recently fueled by Musk's positive comments about the dominant cryptocurrency. In a Clubhouse session, the billionaire said he is a supporter of the cryptocurrency, although he added that it would be ironic if Dogecoin, the meme cryptocurrency, would become a "world" currency one day.

With Tesla buying Bitcoin, Novogratz is convinced more companies in America will do the same thing. Whether it's all companies or not, the CEO said it doesn't have to be a lot. "It's the messaging that matters, you're seeing the herd here, and it's coming."

Novogratz said he thinks Musk was a genius because he decided to "listen, weigh the interest of the younger generation." What connects Bitcoin and tesla is millennials and Gen Z, Novogratz said, adding, "They see cryptocurrencies – Bitcoin and other cryptos – as their currencies."

News of Tesla's investment in bitcoin lifted the cryptocurrency to a new record News of Tesla's investment in bitcoin lifted the cryptocurrency to a new record Photo: AFP / Odd ANDERSEN