Mike Novogratz, the founder of Galaxy Digital, has suggested that now is the right time to buy Bitcoin, the flagship cryptocurrency.
In an interview on March 15 with CNBC, the crypto mogul compared the current market conditions to December 2018, when the Federal Reserve’s interest rate hike sent markets into a tailspin. He argued that the recent commodity market slump, particularly the oil market, indicated that the U.S. and the world were heading into a recession and a credit crunch.
Novogratz predicted that Federal Reserve Chair Jerome Powell would need to pause and even cut rates soon. Consequently, this could lead to a significant shift in psychology that could benefit Bitcoin and Ethereum.
“If there was ever a time to be in Bitcoin and crypto, this is why it was created,” said Novogratz. “Governments print too much money whenever the pain gets too great. And we are seeing that.” He suggested that the current banking crisis in the U.S. had contributed to Bitcoin’s increased price, as it was being seen as a safe-haven asset.
Bitcoin’s decentralized and censorship-resistant nature came into the spotlight after the collapse of Silicon Valley Bank (SVB), which was compared to the 2013 Cyprus crisis. In response, the U.S. federal government has intervened to reassure customers that their deposits are secure and to prevent depositors from withdrawing their funds from smaller lenders.
Novogratz also expressed concern about the contagion effect on the banking system. He predicted that people would learn their lessons and move toward four or five big depository institutions unless the Fed took further steps to guarantee deposits. He argued that Congress and the Fed would need to do something more dramatic on deposits, or there would be constant pressure on regional banks and the whole system.
As reported by U.Today, Bitcoin’s market capitalization managed to reclaim the $500 billion mark on Tuesday, reaching $26,533 on the Bitstamp exchange.
The market is speculating that the current crisis might push the Fed to put the brakes on interest rate hikes. Novogratz’s comments suggest that Bitcoin and other cryptocurrencies could benefit from a shift in psychology and a global recession.