Galaxy Digital CEO Mike Novogratz is warning that the problems currently plaguing banks are wide and deep-seated.
Novogratz says in a new CNBC interview that there’s going to be a credit crunch globally based on what some leading indicators are suggesting.
“The commodity market is telling you, oil market is telling you… we are heading into a recession. We are going to have a credit crunch in the US and globally.”
According to the Galaxy Digital CEO, the credit crunch will be caused by banks reducing lending activity as they rebuild their capital bases after a fall in deposits triggered by depositors’ fears over the safety of their assets.
“Now you’ve got a market that’s going to go into a credit crunch. How do banks rebuild capital? They lend less. And so you’re going to see a credit crunch happening in the United States and that’s starting to get priced the market in a dramatic way.”
While forecasting that interest rates are likely to fall in the near term after a series of hikes, Novogratz says that the creation of Bitcoin (BTC) was inspired by loose monetary policies such as the ones that are about to set in.
“Fixed income, commodities will tell you we are headed to a recession. [Federal Reserve Chair] Powell should pause and we’ll be cutting rates sooner than we think.
And so that’s a huge difference in psychology. It’s got Bitcoin and Ethereum on the move. If there was ever a time to be in Bitcoin and crypto, this is why it was created in that governments print too much money whenever the pain gets too great. And we’re seeing that.”
IDon't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney