Coinspeaker
Crypto Bull Novogratz: Why Fed Policy Will Push Bitcoin and Gold to New Highs after Spot BTC ETF Approval
According to Michael Novogratz, founder of digital asset management company Galaxy Digital, things may soon change for other stores of value like gold and Bitcoin (BTC) as the United States Federal Reserve changes course. In a Bloomberg interview, Novogratz shared optimism for these assets based on expectations that the Fed will become less aggressive with its policies.
Since it looks like the Fed is shifting from tough tightening policies, Novogratz believes the US central bank will spark an increased willingness among investors to take on more risks across various markets. Also, the US dollar has already shown declines as traders anticipate future Fed rate cuts in prices.
Economically, Novogratz sees meaningful slowing in the US early next year, clearing the way for Fed rate cuts by mid-2024. Recent dollar weakness could show a long-term change as well. Despite the shifting situation, Novogratz stays strongly positive on Bitcoin (BTC), especially if Wall Street giants like BlackRock or Fidelity join the physically backed ETF train.
For Bitcoin, Novogratz notes some possible supports, including physically-backed ETF approvals, less selling activity from long-term holders, and reduced creation of new coins which will be introduced by the upcoming halving event next year. Under this situation, he believes Bitcoin could go beyond its old all-time highs next year.
Novogratz is not the only expert who expects Bitcoin prices to skyrocket soon. One of the popular reasons is that the long-term holder is not selling off their positions for the belief that the crypto will soon experience a bull run and the expectation of more bullish price potential, especially because the coin has not reached its full potential. His belief that the approval of the physically back ETFs will also drive the price up is agreed upon by many analysts, especially because the acceptance is expected to drive hundreds of billions of dollars into the BTC market, seeing that major financial giants like Black Rock and Fidelity are also involved.
How Other Currencies Could Fare, According to Michael Novogratz
Novogratz’s negative forecast for the US dollar is also based on weaker US growth and interest rate direction. However, he sees Euro, Australian dollar, and Brazilian real doing well if the dollar remains weak. The expert also sees upside potential for gold if prices stay above $2,000 for some weeks. Additionally, silver could surge even higher as shortages stoke demand. However, Novogratz maintains a gloomy outlook for China’s yuan, given disappointing economic data.
Commenting on the crypto sector overall, Novogratz said most fraudulent projects were removed during the 2022 decline as markets and regulators effectively eliminated bad actors. They are also ensuring existing projects are fully compliant with regulations and any wrongdoing is punished, as evident in the recent Binance and its CEO’s cases. The way regulators and relevant government agencies have handled cases of fraud within the industry has also been highly commendable.
