Both cryptocurrencies and stocks crashed on Monday due to inflationary pressure and anticipated rate hikes by Fed. In the case of crypto, the plunge was also amplified by the liquidity crisis on the leading lending platform Celsius and stETH depeg from Ether. Novogratz, however, believes that the market will tumble even deeper.
“Ethereum should hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20% decline,” Galaxy CEO said, adding that now isn’t the best time to pour large capital in cryptocurrencies unless there is a strong signal that Fed will stop hiking.
At the same time, Mike Novogratz remains optimistic about the subsequent rebound. "Bitcoin will lead the markets back out of this Fed tightening. The moment the Fed glitches, the moment Powell pauses because the economy is really starting to roll over, you are going to see Bitcoin explode north," he stated optimistically in an interview with CNBC.
Galaxy Digital, a blockchain- and web3-oriented investment management company, was heavily invested in Luna but managed to exit the asset before the collapse. Galaxy also holds an unspecified amount of BTC and ETH.
