In a recent interview with CNBC, the founder of Galaxy Digital, Michael Novogratz, said that America is headed for a credit crisis.
In light of that argument, Novogratz said in the interview that the moment is a great opportunity to buy into investments like gold (XAU), silver (XAG) and bitcoin (BTC).
“We are about to have a credit crunch in the US and globally. At this point, you will want to buy gold and silver and you also want to buy bitcoin,” he said.
Novogratz points out that because banks typically raise capital by lending less, a credit crunch is imminent. In addition, he emphasized that signs of recession have gradually emerged, such as signs in the commodity market.
This month, the US banking industry witnessed a new crisis when Silvergate Bank, Signature Bank and Silicon Valley Bank (SVB) went bankrupt in just one week. The outlook for the US banking system has been downgraded to “negative” by Moody’s.
Novogratz said a change in interest rate policy is coming. He acknowledged that the Federal Reserve would “prefer to do a dovish rally.” However, he asserted that doing so would be a “major policy error.” Novogratz expressed his optimism for the crypto market, especially for bitcoin (BTC) and other investments like gold and silver.
“If there ever was a time when bitcoin and cryptocurrencies existed, this is why it was created, where governments print too much money whenever the pain becomes too great and we are witnessing it. see that,” Novogratz said.
Will Bitcoin and Gold Rise to New Highs?
BTC and XAU have shown significant growth over the past week. XAU has gained nearly 4.8% over the past seven days. Gold (XAU) is currently facing resistance at $1927.16 while it has placed support at $1,885.44.
On the other hand, BTC has earned as much as 12.4% gains in the last week. BTC price is currently facing resistance at $25901.14, with support at $23875.71.
Based on the current performance outlook, both gold (XAU) and bitcoin (BTC) appear to be heading up. Furthermore, both assets are considered to be inflation hedges. Therefore, if there is a credit crunch in the US, then assets like gold, silver and bitcoin will be the ones to invest in. At the time of writing, BTC is trading at $24,405, down 1.7% over the past 24 hours. Meanwhile, gold is trading at $118.24.
See also: Wall Street expert: Credit Suisse will be the next name to collapse