Bitcoin Will Not Fulfill Its Role As A Transactional Currency, Says Michael Novogratz

  • Michael Novogratz thinks Bitcoin will not be used as a transactional currency in the future.
  • He holds this view despite the increasing adoption of The Lightning Network.
  • The CEO believes serious investors would move away from Bitcoin and embrace newer projects.

Michael Novogratz’s opinion of Bitcoin might irk some enthusiasts but he believes it is the hard truth. He downplays Bitcoin’s energy consumption rates, saying it is inconsequential.

Bitcoin Forever

In a recent interview with CNBC’s Squawk Box, Michael Novogratz, CEO of Galaxy Digital has bared his mind on the future of Bitcoin as an asset. The CEO thinks the asset will become less volatile as more institutions flood the space and notes that it is already happening.

“I do think volatility in Bitcoin is coming down. If you look at Bitcoin vs Ethereum vs other altcoins, Bitcoin’s volatility is much lower,” said Novogratz. He notes that the lowering volatility is also a result of investors seeking large gains choosing to invest in the “coin of the month.”

The Galaxy Digital exec revealed in the course of the interview that he thinks Bitcoin will not be used regularly for transactions but will end up being used primarily as a store of value. Novogratz thinks that this pattern will play out in countries with scathing inflation figures.

“I don’t think Bitcoin will become a transactional currency. I think it is more tailor-made to being a store of value,” said Novogratz. He argues that this will happen irrespective of the development of The Lightning Network. Over the years, the Lightning Network is often considered as the answer to the question of whether Bitcoin can effectively be used as a currency. The Lightning Network is a protocol layer built on the bitcoin blockchain and is deemed to make transactions faster and cheaper.

Bitcoin Uses Less Energy Than Christmas Lights

Novogratz noted in the course of the interview that Bitcoin’s energy consumption rates are blown out of proportion. He said that the network uses 0.17% of global energy which is less than Christmas lights.

His comments were in response to the claim that while blockchain technology is here to stay, another blockchain was going to take Bitcoin’s place because of its energy crises. Novogratz adds that the bitcoin miners are increasingly using green sources of energy as the narrative begins to shift away from fossil fuels.

The ecosystem is buzzing over the potentials of mining Bitcoin with nuclear energy while El Salvador has seized the initiative to begin mining Bitcoin with geothermal energy. Ingenious miners are also taking steps to utilize flared gas to mine the cryptocurrency in what has been described as an energy-efficient process.

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