- Mike Novogratz said bitcoin will not be used as a form of payment because the network can't support thousands of transactions.
- The long-time bitcoin bull said the cryptocurrency is a store of value asset akin to a digital gold.
- He added that with "insane" global deficits, investors would be crazy to get out of bitcoin.
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Billionaire bitcoin bull Mike Novogratz said that the cryptocurrency will not be used as a form of payment because the network isn't set up for it.
In an episode of the Exchanges at Goldman Sachs podcast, the Galaxy Digital Holdings CEO played up bitcoin's use case as a store of value and asset class, and not a new form of payment.
"Bitcoin's not going to be payments. The system really isn't set up for payments. It's not fast enough for thousands and thousands of transactions," he said.
Bitcoin's anonymous founder, Satoshi Nakamoto, presented bitcoin as a peer-to-peer cashless digital currency in the 2008 white paper. But now, crypto investors like Novogratz see other digital currencies taking on the payment role, and say bitcoin will be more akin to a digital gold.
Novogratz said the investment case for bitcoin lies in the fact that it's the most distributed asset in the history of the world outside the dollar, and it's a uniform store of value.
"What's unique about stores of value is they're social constructs," he added. "It has value because we say it has. There has never been a more successful brand created in 12 years by a community. It was like they floated the baby in the river, and the community raised the baby and it's now worth around $1 trillion."
The current macroeconomic backdrop is "tailor made" for owning bitcoin, said Novogratz. With more Americans supporting forms of universal basic income and fiscal spending measures like free college tuition, the US government is likely to keep spending money, while other deficits around the world are likely to grow as well.
"The treasury department and the government is financing everything we want to spend, and that's happening in countries all over the world. So we had bad deficits before COVID. Now we have deficits that are insane. So as long as that macro backdrop, that political backdrop is giving us a tailwind and the market is being adopted, you're crazy to get out," Novogratz said.