Galaxy Digital CEO Michael Novogratz says Bitcoin (BTC) could start to take off again soon after the Federal Reserve takes a pause on interest rate increases. Novogratz made the remarks at the “Bitcoin 2022” conference in Miami.
According to the billionaire crypto investor, the Fed, headed by Jerome Powell, will remain “very hawkish for a while” due to high inflation. He added that the central bank is likely to raise interest rates by 50 basis points soon.
Bitcoin hodlers should wait for the Fed to take a pause on interest rate increases, which would likely lead to more bitcoin buying. As the economy slows down and the Fed steps back, “bitcoin goes to the moon,” Novogratz said, repeating a catchphrase popular among crypto enthusiasts.
It’s worth noting that bitcoin’s price has already come a long way, gaining more than 690% since March 2020.
The former Goldman Sachs partner also reiterated a call that the apex cryptocurrency will reach a price of $500,000 and eventually $1 million.
“I go to bed and I pray that the stewards of the U.S. economy don’t screw it up,” BNN Bloomberg quoted Novogratz as saying. He added that he has Russian friends who have gone “bankrupt” recently.
“And so I really do pray that the dollar is going to be strong and it doesn’t go to infinity because Bitcoin going to infinity means the rest of the Western world has really fallen apart,” he said, though the $840 billion market cap digital asset can reach his price targets “with stability in the West.”
The price of bitcoin has been trading in a narrow range over the past few days, unable to break out above $48K, a crucial area of resistance for the digital asset to close above.
This follows a period of volatility in which the cryptocurrency saw its value decline from around $44,000 in early January to a low of $35,000 in late February. Despite this recent decline, many analysts remain bullish on BTC and expect it to re-test all-time highs reached in November. So far, support has been found at around $44,000 – if this level fails to hold, we could see further declines towards $40,000.
Proponents of bitcoin have been debating for a long time which of its narratives is most prevalent. Some believe in the inflation hedge thesis, while others oppose it.
Novogratz however, believes that bitcoin’s purpose is not for purchasing everyday items like shoes. He said that he’s “going to take some of [his] wealth and preserve and store it there.” Institutional investors, he added, are allocating an increasing amount of their portfolios to bitcoin.
BTC has been on a downward trend since its $69k peak in November 2021. The cryptocurrency was trading at $44,100, at press time, down about 4% on the day.
Reference: BNN Bberg