The chief operating officer of crypto investment firm Galaxy Digital, Mike Novogratz, has predicted that in order for the cryptocurrency market to recover, the Federal Reserve will need to back down.
Speaking at the Consensus 2022 conference in Austin, Texas, he said Bitcoin (BTC) is not going to “trade well” until the Federal Reserve “flinches” and “takes its foot off the brake.”
According to Novogratz, the most popular digital asset in the world would also find a bottom before the equities markets in the United States, CoinDesk reported on June 10.
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The Galaxy Digital CEO said:
“My hope is that by the fourth quarter, the economy will be slowing enough that the Fed says we are going to pause, and then you will see the next crypto cycle start. Then Bitcoin will break from equities and lead markets.”
He added:
“Rates are going to 5% in the U.S. I hope crypto can decouple.”
The next crypto bull market
Novogratz urges investors to “fight the impulse to be so greedy” in order to successfully navigate the next bull market. This advice applies to Galaxy Digital and other companies as well.
According to the former hedge fund manager, investors who bought Luna at the right time saw returns of up to 300 times their initial investment, which is an unrealistic expectation given the current state of the market.
“When ecosystems go real fast, there’s a reason for it. Know what you are investing in. You don’t get 18% for free.”
Two-thirds of crypto hedge funds will go bankrupt
Whatsmore, Novogratz, on June 8, had also predicted that the majority of hedge funds that invest in digital currencies would be unsuccessful owing to the recent decline in market value.
The billionaire was speaking at the Piper Sandler Global Exchanges & Brokerage Conference in New York when he said:
“Volume will go down, hedge funds will have to restructure. There are literally 1,900 crypto hedge funds. My guess is two thirds will go out of business.”
As per Novogratz, the continuous drop in prices of cryptocurrencies over the past six months can be attributed to the market’s reaction to the U.S. Federal Reserve’s stimulus withdrawal.
Featured image via Bloomberg’s YouTube (screenshot).
