The world economy will settle in a way that favors bitcoin, says Novogratz. Despite that, many companies in the industry may not recover from the current crisis.
According to American businessman Mike Novogratz, this crypto winter could end in October 2022. Since then, according to him, bitcoin will break away from stocks and become a leader again.
The founder and CEO of Galaxy Digital recently shared his thoughts during his role at the Consensus 2022 conference. He said he expected the economy could slow down enough to experience the beginning of the next cycle of digital assets.
Novogratz, an investor in bitcoin (BTC) and digital assets, is convinced that rates would be 5% in the US. For this reason, he hopes that digital assets can get decoupled.
BTC has some price correlation with traditional markets, particularly the NASDAQ tech stock index. In January of the current year, bitcoin and usual markets started running in parallel. More recently, in mid-May, the correlation with the S&P500 and NASDAQ indices was about to reach a new all-time high peak.
There is Some Optimism in the Air
The businessman says Galaxy will expand its tentacles, even in the face of the recession, in contrast with rivals like Gemini Trust Co, which are currently firing staff to survive the aggressive market. Instead, Novogratz expressed that he will keep hiring people and, according to him, there is no shortage of talent or enthusiasm in digital assets.
Novogratz acknowledged that he observes a bumpy road ahead for stock and crypto investors but still felt optimistic that there will be an expansion of digital assets acceptance and its real-world application. He referred to Bitcoin as a solid house of value that will keep its position as a real macro asset.
However, regarding the digital asset and equity markets, Novogratz is not betting on a V-shaped recovery. Instead, he foresees a mixture of market ups and downs and sideways moves until a new narrative rises about the macroeconomic scenario and Interest rates.
He said the US Federal Reserve’s interest rate hike to minimize inflation would generate setbacks and uncertainty in economic structures. He claimed that a battle waits ahead, and he is just getting ready to fight and win.
About Terra
Likewise, Novogratz also linked the collapse of the Terra blockchain, in which he and Galaxy were prominent investors, to macroeconomic factors but not project failures or flaws.
PwC’s annual global crypto hedge fund report showed Terra USD (UST) to be the third most popular stable coin among crypto hedge funds they surveyed in April 2022, or just before Terra fell. 49% of PwC respondents also traded the Luna token, which Novogratz immortalized with his tattoo.
By: Jenson Nuñez
