- Bitcoin hit a 10-month high on Tuesday amid a broader rally in the cryptocurrency market.
- Galaxy Digital CEO Mike Novogratz said the market is pricing in a slowdown in Fed rate hikes and a credit crunch in the US.
- In an interview with CNBC, he said the recent bank failures have “reinvigorated” the original use cases for cryptocurrencies.
Galaxy Digital CEO Mike Novogratz said the latest crypto market rally echoes trader speculation about a slowdown in central bank tightening and a looming US credit crunch.
in an interview with CNBClongtime Bitcoin bulls have also argued that rising token prices could be seen as a threat to cryptocurrencies as a refuge from government monetary policies such as Federal Reserve interest rate hikes and the risks of holding money in the traditional banking system. He said he would highlight the first use case.
Bitcoin’s white paper, a document stating its intended purpose, was released around the time of the 2008 global financial crisis out of a “distrust of centralized governments.” [and] banks,” Novogratz told CNBC.
And today, he adds, recent bankruptcies by specialist lenders like Silicon Valley Bank and fears of a looming credit crisis have “reinvigorated the original story.”
The former Goldman Sachs partner said of Bitcoin, Ethereum and gold, “We are facing a credit crisis in the United States…Assets that perform well in an economic slowdown are giving us is telling you something
“Based on a lot of things, we’re having a pretty constructive rally… the market is [Fed] chairman [Jerome] Fed Chair Powell is over or nearing the end,” he said, citing optimism that the tightening would soon be over.
Indeed, Bitcoin proponents often market it as an inflation hedge. However, cryptocurrency prices are highly sensitive to Fed action, with policy tightening hitting cryptocurrencies and other risk assets and policy easing boosting those assets.
Cryptocurrencies have been trending upwards since the beginning of the year. Bitcoin and Ether are up 68% and 37% respectively over the past three months. Bitcoin hit a 10-month high on Tuesday, surpassing $30,000. Lackly.
