Galaxy Digital's CEO, Michael Novogratz, a well-known cryptocurrency enthusiast, has predicted that the digital asset market's recovery could take a while, depending on the US Federal Reserve's actions. In an interview with Bloomberg journalists, Novogratz stated that one should not expect a quick recovery in the prices of bitcoin and ether amid the general financial crisis.
"The moment the Fed stops… I think you will see a lot of traditional macro funds that had a great year start buying bitcoin. We too will begin to increase our position at this point."stated Novogratz
Base Rate Increase Hinders Cryptocurrency Market Growth
Novogratz believes that in the coming months, the US Federal Reserve will increase the base rate, which will hinder the growth of the cryptocurrency market. However, when the Central Bank of the United States finishes raising rates, he believes that money from large hedge funds will flow into Bitcoin and Ether. "The moment the Fed stops… I think you will see a lot of traditional macro funds that had a great year start buying bitcoin. We too will begin to increase our position at this point," stated Novogratz.
Margin Positions Affect Cryptocurrency Rates
The CEO of Galaxy Digital called too much margin positions as one of the reasons for the current weakening of the leading cryptocurrencies' rates. Additionally, large players such as Three Arrows Capital appear to have failed to hold collateral for margin positions, leading to their closing. Such margin calls lead to massive sales and a rapid decline in the market.
Expectation of Bankruptcy in Cryptocurrency Industry
Novogratz expects that many cryptocurrencies, not just companies, will declare bankruptcy in the near future. Despite this, he continues to look positively at the cryptocurrency industry, comparing it to Zoom Meeting, which, despite significant losses, is unlikely to leave the market. Cryptocurrencies, despite the fall, will not leave the financial scene anywhere, according to Novogratz.
Unlikely Fall of Bitcoin and Ether Prices
Earlier, the cryptocurrency enthusiast said that bitcoin is unlikely to fall below $20,000, and ether below $1,000. However, it is important to note that the cryptocurrency market is highly volatile and unpredictable.
In conclusion, Galaxy Digital's CEO, Michael Novogratz, believes that the US Federal Reserve's actions will significantly impact the recovery of the digital assets market. He expects that many cryptocurrencies will declare bankruptcy in the near future but remains positive about the industry's future. Despite the fall in prices, cryptocurrencies are here to stay.