Michael Novogratz, CEO of Galaxy Digital and a cryptocurrency enthusiast, believes that the digital asset market will take a long time to recover and is extremely dependent on the activities of the US Federal Reserve.
Michael Novogratz said in an interview with Bloomberg journalists that bitcoin and ether prices will not recover quickly due to the overall financial crisis. According to Novogratz, the US Federal Reserve will raise the base rate in the coming months, impeding the expansion of the cryptocurrency industry.
However, once the US Federal Reserve has finished rising rates, major hedge funds will pour money into bitcoin and ether:
“As soon as the Fed stops… I believe that many traditional macro funds that have had a good year will start buying bitcoin. At this moment, we will also begin to strengthen our position.”
Too high margin positions, according to the CEO of Galaxy Digital, are one of the reasons for the current weakening of the rates of the top cryptocurrencies.
Furthermore, significant players such as Three Arrows Capital are involved. This fund appears to have failed to maintain collateral for margin positions, causing them to be closed. Such margin calls result in large sales and a quick market fall.
Many cryptocurrencies, not only enterprises, according to Novogratz, will go bankrupt in the near future. At the same time, Galaxy Digital’s CEO is optimistic about the bitcoin business.
He compared it to Zoom Meeting, which is unlikely to go out of business despite large losses. Cryptocurrencies, despite their decline, will remain a part of the financial landscape.
Bitcoin is unlikely to fall below $20,000, and ether is unlikely to fall below $1,000, according to a cryptocurrency fan.
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