Note: Galaxy Digital has two businesses, one in crypto and digital assets and a growing arm repurposing bitcoin mining infrastructure to supply computing capacity for AI workloads. Novogratz’s calls on both AI and bitcoin align with his company’s revenue lines, and readers should weigh them accordingly.
- Michael Novogratz said artificial intelligence is in the biggest bubble of our lifetime and that investors should buy into it anyway, speaking on a panel at the Greenwich Economic Forum. He argued that bubbles end spectacularly and that current conditions are not spectacular enough to mark the top.
- He also described AI-linked shares as still cheap on a price-to-earnings basis, a characterisation that sits awkwardly beside calling the same assets a historic bubble.
- AI gains pushed the S and P 500 to a record high Tuesday, with Nvidia’s market value approaching $6 trillion. Novogratz said rising long-term borrowing costs are clouding the outlook but are not enough to end the advance.
- On crypto, he expects bitcoin to finish 2026 near $100,000 and to pass its all-time high by the middle of 2027. It traded around $83,000 on Wednesday, roughly a third below its peak near $126,000 a year ago, so reaching $100,000 by year-end implies a gain of about 20% in under three months.
What Happened?
Novogratz said bipartisan feeling that getting to advanced AI before China is close to existential makes it unlikely that industry or regulators will slow development, even to the degree that the people building it would like. Galaxy’s operations span trading, lending, market making, venture investments and bitcoin mining, with some mining infrastructure now repurposed for high-performance computing.
Why It Matters?
The position holds together only as a timing call, and it should be read that way. Describing something as the largest bubble of a lifetime while also calling it cheap on earnings are contradictory assessments of the same assets, and the reconciliation offered is that bubbles end dramatically and this one has not yet. That is a momentum argument wearing valuation clothing. Anyone acting on it is betting on being able to identify the spectacular phase and exit before it completes, which is the hardest thing in investing and the thing almost nobody does. The geopolitical observation is the most substantive part and is probably correct. A bipartisan conviction that losing to China is unacceptable makes meaningful restriction of AI development unlikely, which is consistent with the administration dismissing safety concerns as a hoax, with the industry response taking the form of voluntary commitments, and with the fate of proposals in Congress that would actually bind. For investors that means near-term regulatory risk to AI capital spending is low, supporting valuations now while concentrating the risk into whatever eventually forces action. It is also notable that Novogratz expects the industry to be unable to slow down even to the extent its own builders want, which is an unusual way to describe a market you are advising people to buy. On the range of professional opinion, there is none. Ray Dalio has said we are nearing the point where the bubble may burst, Bank of America analysts see a tech bubble forming and advise clients to buy anyway, Treasury Secretary Bessent downplays the concern, and DBS argues Nvidia’s valuation shows it is not a bubble at all. Four credible positions spanning the entire range means the question is genuinely unsettled, and investors should be sceptical of anyone presenting either answer as obvious. The bitcoin forecast also runs against current positioning data, with derivatives analysts describing an orderly reset that historically precedes range-bound trading and open interest at its lowest since March.
What Next?
Nvidia approaching $6 trillion is the single most consequential number in equity markets, and its next results are the test of whether earnings justify it. Watch long-term yields, with the 30-year at 5.663%, since Novogratz’s own caveat is that borrowing costs are the cloud over the outlook. For bitcoin, the $100,000 year-end target requires roughly 20% in under three months against a market that has stalled near $85,000. The regulatory question is settled for now, so the variable to monitor is whether any incident forces a change in a posture that currently has bipartisan support.
Affected Tickers and Coins: NVDA, BTC, COIN, MSTR
Source: Bloomberg
