Crypto investor Novogratz sees this level as key for bitcoin, predicts 'next surge' before year-end

Published Wed, Sep 29 202112:19 PM EDTUpdated Wed, Sep 29 202112:39 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Crypto investor Mike Novogratz told CNBC on Wednesday he expects bitcoin to mount another significant run higher before the end of the year. "Crypto had a huge run in the quarter, in general, and we're in a consolidation mode," the Galaxy Digital CEO said on "Squawk Box." "I think $40,000 is an important level for bitcoin to hold, maybe $38,000 at the stretch." He added, "$2,800 in Ethereum seems to be an important level to hold, and we're still in those ranges." Bitcoin traded around $42,000 per token Wednesday, the penultimate day of the third quarter, putting its quarterly gains around 20% so far, according to Coin Metrics data. Bitcoin, the world's largest cryptocurrency by market value, ended Q2 trading at $34,771, per Coin Metrics. Ether, which runs on the Ethereum blockchain, is up about 30% so far in the third quarter, according to Coin Metrics. The world's second-biggest cryptocurrency traded around $2,900 per coin Wednesday. It ended Q2 on June 30 at $2,229, according to Coin Metrics. "My guess is it's not until halfway, a third of the way through the fourth quarter that you see the next surge" in cryptocurrencies, said Novogratz, a longtime digital asset bull. He's also a former Goldman Sachs macro trader and fund manager at Fortress Investment Group. "That's kind of like when you go to the racetrack, the horse that turns the corner on the way to the finish line usually wins," Novogratz said. "In investing, the great asset class, as it gets close to the year-end, the asset class that's done the best usually has a great finish. It's just the psychology of traders and investors, so I'm still pretty optimistic for the fourth quarter in crypto, but I think we've got some more chop to go through." Bitcoin notched its all-time high of nearly $65,000 in April, right around the time of the blockbuster direct listing from crypto exchange Coinbase . However, it sold off sharply in the weeks that followed and sank below $30,000 in June and July . It's been marching higher since mid-July and in early September topped $51,000 for the first time since May . Ether's all-time high, above $4,000, came in mid-May, but it's followed a trading pattern similar to bitcoin's over the summer and into the fall. Cryptocurrencies are known for their volatility, as their daily price action can sometimes swing substantially based on headlines. For example, bitcoin and ether slid Friday after the People's Bank of China said in a Q & A posted to its website that all crypto-related activities are illegal in China.

Michael Novogratz, CEO of Galaxy Investment Partners.

Adam Jeffery | CNBC

Crypto investor Mike Novogratz told CNBC on Wednesday he expects bitcoin to mount another significant run higher before the end of the year.