Michael Novogratz, a former hedge-fund manager who is heavily invested in digital currencies, called a bottom on cryptocurrencies Thursday.

"I think we put in a low yesterday," Novogratz said in a tweet. He also noted the Bloomberg Galaxy Crypto index, which measures the performance of the largest digital currencies traded in dollars, "retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble."

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Popular cryptocurrencies such as bitcoin, ethereum and bitcoin cash have fallen sharply this year and are trading well below the highs seen late last year. In 2018, bitcoin has dropped about 51 percent, while ethereum and bitcoin cash are down 73 percent and 82 percent, respectively.

Cyptocurrencies have been under pressure amid increased scrutiny from regulators. Last month, the Securities and Exchange Commission rejected nine proposals for bitcoin ETFs. The SEC also suspended trading in two bitcoin and ethereum-related products, citing confusion over materials characterizing them as ETFs.

Still, Novogratz thinks digital currencies will bounce back. "Markets like to retrace to the breakout," he said. "We retraced the whole of the bubble."

Bitcoin was up about 2 percent in the last 24 hours, according to Coinbase.