Billionaire Mike Novogratz Believes Bitcoin Price Will Surge if Fed Makes This Decision
Mike Novogratz forecasts a bullish takeoff for Bitcoin (BTC) once the US Federal Reserve eases down on its aggressive rate hikes aimed at taming inflation.
The current cycle has especially been tough for the firstborn crypto, as it suffers from both an unfavourable outlook, and the effects of growing correlation with traditional finance. As a consequence, Novogratz believes the asset will stage a comeback once the abysmal macro climate cools.
Novogratz disclosed these opinions while speaking on a CNBC Squawk Box episode Tuesday. The 53-year-old CEO of Galaxy Investment Partners implied that Bitcoin lost its status as a potent hedge against inflation when Fed Chair Jerome Powell began his campaign of interest rate hikes.
Bitcoin, often touted as an inflation hedge, collapsed in tandem with other risk assets as the Fed staged its response against inflation. The asset's recent correlation with traditional finance contributed to its fall.
"When Powell started beating inflation over the head with a sledgehammer, of course, Bitcoin came back down as did lots of assets," Novogratz remarked.
Notwithstanding, the American billionaire and investor argued that Bitcoin will likely see a breakout once Chair Powell "gives up the fight against inflation." According to Novogratz, Powell's moves towards combating inflation have a more detrimental effect to Bitcoin than inflation itself.
Last month, the Fed raised benchmark interest rates by another 75-basis point in its continued fight against inflation. The move marked the third consecutive 0.75% hike, and the central bank noted that hikes could persist going forward.
Hikes in interest rates do not come without their adverse effects on the economy and risk assets. In view of this, a UN
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