There was more of the same in cryptocurrency markets today. 

Ethereum's price continued its upward trajectory even as bitcoin moved sideways. At 13:54 UTC, the price of an ether token was $1,358.67, up 13.18% from its price 24 hours ago. The total market capitalization for ethereum was $131.6 billion, up from $117 billion around the same time yesterday. Bitcoin was trading at $14,202, down by 3.51% from its price 24 hours ago.  

Other currencies shed gains. Ripple, which had skyrocketed by more than 1,000 percent since January 1, continued its downward slide and was trading for $1.95 per pop, down 13.5% from its price a day ago. At $75 billion, its valuation has roughly halved from a week ago. Cardano, another coin which reached a high of $1.31 last week, was down by 13.35% and trading at $0.7 per coin.   

Apart from ethereum, bitcoin cash was the only other cryptocurrency within the top 10 most-traded to rise within the last 24 hours. As of this writing, it was trading at $2,527.72, an increase of 6% from its price 24 hours ago. 

The overall market capitalization for cryptocurrencies was $712.2 billion.   

Mike Novogratz Announces Merchant Bank for Cryptocurrencies 

Michael Novogratz, perhaps the most well-known Wall Street investor in cryptocurrencies, announced yesterday that he is starting a merchant bank exclusively devoted to the asset class. A complex set of transactions, which includes a direct takeover of a financial firm and a reverse takeover of a pharma company in Canada, will culminate in the new merchant bank being traded on the Toronto Stock Exchange.

Novogratz had earlier announced plans for a $500 million hedge fund but gave up the idea late last year because “market conditions” weren’t “right.” (See also: New $500 Million Hedge Fund Will Focus On Cryptocurrencies.) He said he was also concerned about the prospect of buying bitcoin or ether for clients while trading in them from his personal account at the same time. Personal equity in the form of a stake in the bank helps him overcome that problem. 

Novogratz’s move is important within the context of bringing institutional money into bitcoin. In addition to being another avenue for bitcoin investment, the bank could also help remove bottlenecks, such as the charging of high margins for investment in bitcoin products, from the nascent ecosystem for institutional investing in the cryptocurrency.

Just yesterday, two firms canceled plans to launch bitcoin ETFs after SEC officials “expressed concerns regarding liquidity and valuation” of futures contracts. Across the pond, the Ontario Securities Commission has a relatively friendlier stance towards cryptocurrencies, having approved its first ICO last November. On an overall basis, removal of bottlenecks could help bring more liquidity into bitcoin markets. 

Novogratz has committed 30% of his fortune to cryptocurrencies and is a prolific commentator in the space. He has forecast sideways movement for bitcoin’s price for the first three to four months of this year, after which it will begin rising again. His full year target for bitcoin’s price is $40,000.  

Ethereum May Triple and a Doubling of Bitcoin’s Price Target 

In an interview with CNBC yesterday, Ethereum’s co-founder Steven Nerayoff predicted that ethereum’s price will triple by the end of this year. “What you’re seeing with ethereum is exponential increase in the number of projects - there are billions of dollars being poured into the ecosystem right now - maybe 10 times more projects this year than last year, which could easily lead to a doubling, probably a tripling in price by the end of this year,” he said.

In the last two days, ethereum’s market cap has surged by almost $10 billion on the back of announcements related to new developments and additional research funding. Fundstrat’s Tom Lee shares Nerayoff’s rosy assessment for the future and predicts a doubling of bitcoin’s price by the end of this year. "If [bitcoin] can actually rise close to [that $20,000 level] in the first half of this year, I think in the second half of 2018, we'll see a move bigger than that," Lee told CNBC. (See also: Bitcoin Vs. Ethereum: Driven By Different Purposes.) 

But Warren Buffett Doesn’t Agree 

According to billionaire Warren Buffett, cryptocurrencies will come to a bad ending. But he didn’t provide a timeframe for that ending.  "If I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it but I would never short a dime's worth," he told CNBC this morning.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.001 bitcoin.

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