Bitcoin price unlikely to drop below $50,000 unless 'something dramatic' happens, says Galaxy's Novogratz

Bitcoin BTC +0.87% is currently trading at around $73,000, and it is unlikely to fall below $50,000 unless a significant event occurs, according to billionaire Mike Novogratz, founder and CEO of Galaxy Digital.

Bitcoin has been rallying mainly due to continuous inflows into recently approved spot bitcoin exchange-traded funds in the U.S. and, as long as net inflows are positive, the bitcoin price will keep going higher, Novogratz told CNBC in an interview Wednesday.

"Once that becomes negative, you'll see the first real correction," Novogratz said. "Things are frothy, funding rates are high, and so in times like this, you always have to be ready for a correction. I don't think we go back below $50,000-$55,000. I think that's the new floor unless something dramatic happens," Novogratz added.

There has been a sudden "mindset shift" in the market after spot bitcoin ETF approvals, according to Novogratz, who said Baby Boomers are getting their first shot at bitcoin by investing through registered investment advisors. Meanwhile, bitcoin holders don't like to sell, Novogratz said, adding that they often think of their net worth in terms of how many bitcoins they have and not how many dollars they possess.

Novogratz noted that bitcoin is currently in price discovery mode and could reach $100,000.

Spot bitcoin ETFs

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Spot bitcoin ETFs have been amassing a significant amount of bitcoins. Asked if these ETFs will eventually hold all bitcoin, Novogratz said he doesn't think spot bitcoin ETFs will ever amass more than 20% of the total BTC.

"They're loading up now. It will reach an equilibrium at one point," he said. "And there are a lot of people who still want to custody their own coins or have them in a foreign location custody if they don't trust the country they're in."

Spot Ethereum ETFs

The price of ether has also rallied in recent weeks, currently trading at around $4,000, mainly due to anticipation that spot Ethereum ETH -0.48% ETFs will also get approved in the U.S. According to Novogratz, the Securities and Exchange Commission will eventually approve spot Ethereum ETFs. There are already futures-based Ethereum ETFs, so "you have to have it for cash [spot]," Novogratz said.