Representation of the Bitcoin virtual currency standing on the PC motherboard is seen in this illustration picture, February 3, 2018. REUTERS/Dado Ruvic/Illustration

NEW YORK (Reuters) - Michael Novogratz, former macro hedge fund manager and founder of cryptocurrency asset management firm Galaxy Digital Capital Management, on Thursday said that the bottom in cryptocurrency prices has been reached and bitcoin is due to bounce back.

Bitcoin was last valued at $6,419.03, less than a third of its peak near $20,000 in December 2017. Cryptocurrencies, of which bitcoin is the most valuable, are pieces of computer code that are not backed by any central bank or hard asset.

Bitcoin experienced a “classic speculative global mania” in 2016-2017 but is now on the upswing because the market has hit “seller fatigue,” Novogratz said at Yahoo Finance’s second annual “All Markets Summit.”

Novogratz said that Galaxy Digital’s cryptocurrency index showed a “classic bottom” in the market, with a selloff of more than 85 percent from its peak. Galaxy Digital in May launched an index in cooperation with Bloomberg to track performance of 10 virtual coins.

Novogratz, a former hedge fund manager at Fortress Investment Group and Goldman Sachs Group partner, has been one of the most outspoken advocates of cryptocurrencies on Wall Street.

“Bitcoin has held $6,000. Yes, it is off its highs, but it has established itself as a store of value,” Novogratz said.

There is a lot of institutional money ready to spend on cryptocurrencies, particularly at venture funds, said Novogratz of a move that would boost prices.

Banks will experience “FOMO,” or a fear of missing out, on the crypto trend, Novogratz said. “I think institutions are moving towards investing. It’s shocking how much has happened.”

Asked about the meteoric rise of cannabis stocks, such as Tilray Inc, Novogratz said the prices right now feel like where bitcoin was last year.