NEW YORK (Reuters) - Mike Novogratz, the former macro hedge fund manager at Fortress Investment Group who has joined the mad dash for crypto-currencies, said on Monday that mainstream institutional investors are about six to eight months from adopting bitcoin.

Novogratz said he expects major financial firms will soon start to offer bitcoin or similar products as an investment option, one that could be easily purchased over the phone.

A turning-point product from a big financial firm could arrive within six months, he said, though he declined to name a specific company.

“When it’s that easy, the price of bitcoin or ethereum is going to go much higher. And that is a lot closer than people think,” said Novogratz, who spoke at the Reuters Global 2018 Investment Outlook Summit in New York.

Novogratz is now chief executive of Galaxy Investment Partners, a firm that bets on cryptocurrencies and related businesses.

“The institutionalization of this space is coming. It’s coming pretty quick,” he said.

For the most part though, institutional investors have stayed away from bitcoin BTC=BTSP, the original and largest crypto-currency in terms of market capitalization, despite outperforming all the world's traditional currencies.

Traditional investors still view bitcoin as opaque and highly speculative with potential to collapse even though so far this year bitcoin has soared nearly 580 percent.

Bitcoin surged on Monday to $6,487, recovering more than $1,000 after losing almost a third of its value in less than four days as traders bought back into the volatile cryptocurrency.

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It hit a record peak last week just shy of $8,000.

During the latest pullback over the weekend though, Novogratz said he bought $15 million to $20 million worth of bitcoins.

Early enthusiasts for the crypto-currency were drawn to its revolutionary ideals of transparency and a lack of central or official control. The risks of dealing in bitcoin were laid bare in 2013 when Tokyo-based exchange Mt Gox collapsed after admitting it had lost the equivalent of hundreds of millions of dollars of investor funds.

The currency’s earlier ties to gambling and criminal websites did not endear it to traditional investors.

But bitcoin has since overcome some of those challenges. “We’re past that,” he said.

BIGGEST REGRET FOR 2017

Novogratz’s biggest regret this year has been not buying more cryptocurrencies, such as ethereum, when prices fell, because he knew that they would keep going up.

Ethereum is another public blockchain, essentially a shared database, similar to that of bitcoin. Ethereum’s token is called ether.

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He felt that he made a psychological mistake, comparing the original price he paid to ethereum’s value over the summer. “When it was time to buy it back, I didn’t buy enough back,” he said.

He sees bitcoin, for instance, hitting $10,000 by March.

The former Fortress executive recently created his own crypto-hedge fund, putting in about $100 million of his own money. He hopes to raise about $500 million, making it the largest fund of its kind.

Novogratz said Galaxy’s largest investment is in bitcoin. It has a “very big” holding of ethereum and about 30-35 different tokens and companies. He declined to give the percentages of each holding, citing competitive reasons.

One of those investments is in the token sale of Worldwide Asset Exchange, an online marketplace for so-called “skins,” which are essentially virtual accessories of video game characters. The total market for “skins” is $50 billion.

The skins don’t have much application except to change how a character or a weapon looks.

He is also an investor in FunFair, a decentralized gaming platform.

FORTRESS EXIT

Novogratz, a former Princeton University wrestler, U.S. Army helicopter pilot, and Goldman Sachs Group GS.N partner, is best known as a swaggering "macro" investor in the mold of George Soros who made big wagers on global economic movements.

Novogratz worked at Fortress from 2002 to 2015, where he was a principal and ran its macro hedge funds. They grew to manage billions of dollars and made “Novo” a Wall Street star. But the funds were shut in 2015 following investment losses. Novogratz retired from the firm.

“Very few people have graceful exits from Wall Street. Mine wasn’t as graceful as I would have liked,” he told Reuters.

After Fortress, Novogratz planned to focus running his own money and avoid the complications of external investors. But he fell in love with the promise of blockchain technology after successfully investing in bitcoin, ethereum and other assets.

He has quickly become one of the most prominent advocates of blockchain and has been working to convince larger, more conservative asset managers to get involved.

“It’s potentially wildly disruptive and revolutionary,” Novogratz said.

For other news from Reuters Global Investment 2018 Outlook Summit, see: here