This former hedge fund manager invested 10% of his net worth in Bitcoin and Ethereum. Here’s why.
Michael Novogratz, a former hedge fund manager at major US hedge fund Fortress Investment Group, has revealed that 10% of his net worth is in Bitcoin and Ethereum.
Although he will not reveal exactly how much he is worth, Michael Novogratz is a billionaire who made it into Forbes’ rich list. And there are other billionaires who have built their wealth from cryptocurrencies.
Novogratz saw Ethereum’s potential when it was trading at US$1
According to a CNN report, Novogratz dubbed digital currencies and blockchain the “best investment of my life” at a Harvard Business School event in April, revealing that 10% of his net worth is in Bitcoin and Ethereum.
Novogratz declined to reveal exactly how much he is worth, but his 2015 retirement package from Fortress alone was worth US$255million.
Novogratz met Vitalik Buterin, the creator of Ethereum, at a private dinner party when the cryptocurrency was trading for around US$1, and was convinced of its future potential.
That a veteran investor like Novogratz would get behind digital currencies and blockchain was unexpected given his traditional hedge fund background.
But whilst still working as a hedge fund manager at Fortress, Novogratz was very interested in digital currencies from the time they first started to grow. In 2014, for example, the hedge fund invested US$150 million in the US’s first Bitcoin investment company Pantera Capital.
Charlie Shrem’s success grew from a start of 500 Bitcoins
According to CoinDesk data from April 22, Ethereum has risen to US$48.50 and Bitcoin to US$1,241.69, enough of an “asset revolution” to justify Novogratz’s confidence.
And Novogratz is not the only billionaire to perceive the value of investing in cryptocurrency. Whist still a university student in 2011, Charlie Shrem, who later founded the Bitcoin Foundation and Intellisys Capital, bought 500 Bitcoins, when they were trading at US$3.
When the price rose to US$20, he switched to buying in large quantities in the order of several thousand units, and set up the Bitcoin exchange BitInstant. His idea of selling Bitcoin at the 70,000 stores operated by Walmart and other major US retailers turned BitInstant virtually overnight into a giant business handing Bitcoin transactions worth US$14million. Thanks to this, Charlie Shrem’s personal worth has grown to US$45million (Altcointoday.com 2015 data).
The Winklevoss twins moved into new territory with Bitcoin
The Winklevoss twins, who gained lots of media attention after suing Mark Zuckerberg over who had the original idea for Facebook, are also Bitcoin billionaires. The year after they founded venture capital firm Winklevoss Capital, they set up digital asset exchange trust company Gemini and made their first foray into the Bitcoin market. They are reputed to be worth over US$400million (Altcointoday.com 2015 data).
A well-known Asian Bitcoin billionaire is Yifu Gou, President of New York-based fintech and Bitcoin incubator company CoinApex. In his student days at New York University he started Bitcoin mining just to supplement his living expenses, which subsequently led him to establish ASIC mining hardware maker Avalon.
Other Bitcoin billionaires include “Bitcoin Jesus” Roger Ver, who built up a personal fortune of US$52million through early investment in BitPay and Ripple.
It is no exaggeration to claim that these Bitcoin billionaires’ success was founded on their faith the potential of crypocurrency. Michael Novogratz, who still remembers people laughing at him when he first bought Bitcoin, is now sure of something else – that Bitcoin will top US$2,000 before the end of the year.