Mike Novogratz, founder of Galaxy Digital, says now is the perfect time to buy bitcoin, the world’s largest cryptocurrency.
In an interview with CNBC on March 15, the cryptocurrency mogul compared current market conditions to December 2018, when the Fed’s interest rate hike sent markets into a tailspin. He believes that the recent weakness in commodity markets, especially oil markets, indicates that the United States and the world are entering a recession and a credit crunch.
Novogratz predicts that Fed Chairman Jerome Powell will need to pause or even cut interest rates soon. Therefore, this could cause a major shift in market sentiment and favor Bitcoin and Ethereum.
“If you need a perfect entry point to bitcoin and crypto, now is the time. Every time a crisis gets out of hand, governments print too much money. We are seeing that,” Novogratz said. He stated that the current banking crisis in the United States has led to an increase in the price of bitcoin because it is considered a safe-haven asset.
Compared to the 2013 Cyprus crisis, Bitcoin’s decentralized and censorship-resistant properties gained more attention after Silicon Valley Bank’s (SVB) exit. The intervention was to reassure customers that their deposits were safe and to prevent depositors from withdrawing from smaller lenders.
Novogratz also expressed concern about contagion effects in the banking system. He predicts that unless the Fed takes further steps to secure customer deposits, people will learn their lessons and turn to four or five major depository institutions. He believes Congress and the Federal Reserve need to take tougher measures on deposits, or regional banks and the system as a whole will come under sustained pressure.
Bitcoin’s market capitalization returned to the $500 billion mark on Tuesday, when BTC prices hit $26,533.
Source: TradingView
The market is speculating that the current crisis may force the Federal Reserve to stop raising interest rates. Novogratz’s comments suggest that bitcoin and other cryptocurrencies could benefit from a shift in market sentiment and a global recession.
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