The cryptocurrency market is starting to show some signs of life after trending lower since peaking in late 2021. One investor expects crypto to shepherd broader markets higher on the other side of the Federal Reserve’s rising-rates response to inflation.
What Happened: Galaxy Digital Holdings Ltd (OTC:BRPHF) CEO Mike Novogratz made a bold call on Bitcoin (CRYPTO: BTC) last year on CNBC’s “Squawk Box.”
“Bitcoin will lead the markets back out of this Fed tightening,” Novogratz said.
“The moment the Fed flinches, the moment, you know, Powell pauses because the economy is really starting to roll over, you’re going to see Bitcoin explode north.”
Why It Matters: Novogratz told CNBC that many of the crypto investors he talked to were planning to jump back into the market and start buying when they sensed the Fed was going to pause and recent price action suggests it’s starting to play out that way.
Bitcoin is up over 70% year-to-date and Ethereum (CRYPTO: ETH) is up approximately 50%
Stocks often go down further when this happens, he said, noting that it was gold that led the markets back in the 1970s.
The Galaxy Digital CEO told CNBC he expected increased adoption from big companies to help fuel the recovery in crypto.
“I think every big brand, every big media company is going to use unique digital assets as part of their way to connect to community,” Novogratz said.
He made a call at the time that he expected Bitcoin to bottom around $20,000 and Ethereum to find its footing around $1,000. The way things are shaping up, it appears he wasn’t too far off.
$BTC Price Action: Bitcoin is down approximately 37% over the last year, but it’s up more than 70% in 2023.
This story was originally published on June 14, 2022 and has since been updated with new information.
Photo: QuinceCreative from Pixabay.