Mike Novogratz, the CEO of Galaxy Digital, talked at CNBC’s ‘Squawk Box’ about the current macro environment and cryptocurrencies. He mentioned that the FED is likely going to raise interest rates even higher in the coming months. At the same time, he said that institutions and companies are investing in crypto infrastructure for the future, which could push prices higher.
Mike Novogratz Believes There Could Be a Big Rally in Crypto
Mike Novogratz is optimistic about the future of the crypto industry and believes that we could see a “big, big rally on crypto,” in the coming years. He said that at a moment in which Bitcoin hit $18,200 a few hours ago and after a bear market in 2022 that pushed the price of digital currencies lower.
The Federal Reserve (Fed) and other central banks around the world, especially in developing markets, have been raising interest rates for months, which is highly correlated to how Bitcoin and other virtual currencies moved during the last year. We have seen Bitcoin hitting a price per coin of $69,000 at the end of 2021 when also Ethereum was also traded above $4,500.
In 2021, with massive printing in 2020, digital assets and stock markets surged to new all-time highs. These rallies were generated by central banks keeping interest rates low and huge printing from these institutions in order to fight against the covid-19 crisis. However, this generated significant market distortions that had a strong influence on the price of virtual currencies and equities.
“You’d be waiting to see the Fed pivot. Then, I think, you are going to see a big, big rally in crypto,” he said during the interview. “There’s a put in Bitcoin somewhere because you see these institutions all getting engaged slowly. When I see Blackrock dealing with Coinbase you know people are coming to buy.”
Moreover, he mentioned that CPI numbers could have a large impact on the market in the coming months. The higher the number, the more painful it could be for cryptocurrencies and risk assets. This could mean that the Fed might be far from pivoting, which could have a negative influence on digital currencies and risk assets.
Over the last few days, we have seen the crypto market moving lower. Bitcoin moved to $18,200 and Ethereum reached $1,350. However, they could continue to move lower in the near future if the Fed does not pivot and if central banks continue with an aggressive stance in terms of monetary policy.
In September the Federal Reserve will have its upcoming meeting which could have a large impact on digital assets and the market. It is just a matter of time to see what will happen with virtual currencies and whether they can start or not a new bull run in the near future. This might start as soon as central banks start reducing interest rates or stop with the increase of interest rates.
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