Galaxy Digital founder and CEO Mike Novogratz is predicting that a US economic slowdown will benefit the two leading crypto assets.
In a new CNBC interview, Novogratz says that the crypto rally is due to rising adoption and a belief that the tightening of monetary policy is over or close to an end.
According to Novogratz, Bitcoin (BTC) and Ethereum (ETH) will perform well amid an oncoming US credit crunch triggered by the Federal Reserve’s rate hikes.
“And so we’re having a pretty contractive rally based on a bunch of things. One is the market is pretty certain that [Federal Reserve] Chairman Powell is pretty finished or close to finished [raising interest rates].
We’re heading into a credit crunch in the United States and gold, Bitcoin, and Ethereum, those assets will do well in a slowdown, are telling us something.
The second is adoption. There are 180 million people that own a piece of Bitcoin. That number grows every year. And we’re seeing aggressive moves in Hong Kong, Abu Dhabi, and Dubai because their regulatory frameworks attract crypto as the US is fighting against it. And so we’re seeing a lot of Asian money move in, we’re seeing some hedge funds in the United States participate in the futures market.”
On Ethereum’s Shapella upgrade which will allow the unstaking of ETH for the first time since December 2020, Novogratz says it will be a “big win” for the second-largest crypto asset by market cap.
“Ethereum has underperformed a bit this year. We don’t think there will be much selling, that people will maybe sell their stake rewards…
It will take a couple of days to digest. But Ethereum has its own big and vibrant community that does a lot of good things and this is another big win, a feather in the cap of progress in the Ethereum community…
I don’t see a big sell-off of Ethereum coming.”
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