Billionaire Novogratz: Long Gold, Euro, Bitcoin as 'Clearest Trades' Amid Potential Credit Crunch

cryptonews.com:

Bitcoin and Ethereum, along with gold and the euro, will outperform other investments as the US Federal Reserve (Fed) starts easing its interest-rate increases, argued Michael Novogratz, the founder of the US-based crypto financial services firm Galaxy Digital Holdings.

A string of recent regional bank failures may lead to a potential credit crunch, as lenders take on fewer borrowers - in which case, the economy would slow down. As a response, the Fed would move to cut interest rates more aggressively than expected, Novogratz said to Bloomberg.

Therefore, he argued,

"The clearest trades have been and will continue to be long gold, long the euro, long Bitcoin, long Ethereum — these assets that should do well with the Fed stopping hiking and then cutting."

Per Bloomberg, citing minutes of a March 21-22 meeting released Wednesday, the Fed stated it would keep an eye out for a potential credit crunch to further slow the economy. Also, following the bank collapses, it said it scaled back expectations for rate hikes this year.

Novogratz argued that the first lowering of borrowing costs may come by the end of this year. And should the rates drop, BTC would be in a "sweet spot."

Given that the price of BTC reached $30,000 this week - for the first time since crypto companies started crashing in June last year - the coin "had a huge run," said the Galaxy Digital founder. 

And there may be higher levels to reach still.

"We can consolidate here before moving towards $40,000, as long as the Fed plays out the way I think it’s gonna play out," Novogratz said. 

It is still unclear how one major event will affect crypto markets: the way in which the US regulators deal with the major crypto exchange Binance.

Novogratz noted that the US Commodity