Speaking during an episode of CNBC’s Squawk Box yesterday, Mike Novogratz, CEO of asset management firm Galaxy Digital, said that Bitcoin (BTC) is currently in a consolidation phase as treasury firms are steadily warming up to the idea of adding altcoins to their balance sheets.
Novogratz Suggests Altcoin Stealing Light From Bitcoin
Bitcoin is currently trading about 7.4% below its all-time high (ATH) of $124,128, recorded on August 14. While the cryptocurrency has surged 5,2% over the past two weeks, its price action remains range-bound, indicating that it could be in a consolidation phase.
In a recent TV appearance, Novogratz stated that Bitcoin has been trading sideways for the past month, as treasury companies have focused on accumulating major altcoins lately. However, Novogratz added that BTC may see another upswing toward the end of the year. He said:
Bitcoin’s at a consolidation right now. Partly because you’re seeing a lot of these treasury companies in other coins take their shot.
Indeed, several companies have added altcoins, such as Ethereum, to their balance sheets this year. BitMine Immersion Technologies has emerged as a clear leader, holding more than 2.1 million ETH on its balance sheet, worth almost $9 billion.
Several other companies have joined in. For instance, Ethereum treasury firm ETHZilla recently disclosed that it holds more than 100,000 ETH. Similarly, Nasdaq-listed SharpLink increased its total ETH holdings to over 800,000.
What’s Causing The Pivot To Altcoins?
Multiple reasons could be held responsible for companies choosing ETH over BTC to gain exposure to digital assets. For instance, ETH offers far more use-cases compared to Bitcoin, such as facilitating stablecoin transactions, powering decentralized finance (DeFi), and non-fungible tokens (NFTs).
Recently, Jan van Eck, the CEO of asset management firm VanEck dubbed ETH the “Wall Street token” due to its immense use-cases. He added that Ethereum holds a competitive advantage over its competitors.
Similarly, Jack Ma-linked Yunfeng Financial invested $44 million in ETH. Another firm, the Ether Machine raised $654 million worth of ETH in private financing earlier this month, indicating the rapidly growing trend of ETH-based treasury firms.
Besides ETH, other altcoins like Solana (SOL) are also gaining traction. Earlier this week, design and manufacturing firm Forward Industries stated that it had raised $1.65 billion in cash and stablecoins to launch a SOL-focused treasury strategy.
While altcoins enjoy the limelight, it would be prudent to keep monitoring BTC’s trajectory. A breakout from the current consolidation phase will likely lead to a capital rotation from altcoins to BTC. At press time, BTC trades at $115,050, up 0.4% in the past 24 hours.
