In a recent interview on CNBC’s ‘Squawk Box,’ Michael Novogratz, the CEO and founder of Galaxy Digital, shared his insights on the current state of the cryptocurrency market and its potential future trajectory. He discussed the volatile month of May for cryptocurrencies, particularly Bitcoin, which experienced its worst month since November 2022.
Novogratz described the current crypto market as “lackadaisical,” attributing this to a lack of institutional excitement. However, he noted a constant bid from retail investors who continue to buy and hold small amounts of crypto, which he believes makes for a healthy market. Despite the lack of institutional activity, Novogratz pointed out that the new buyers are all small and aggregated on platforms like Revolut, Robinhood, and Square’s Cash App. These buyers, he said, continue to buy small amounts and hold them, making a pretty healthy market.
The Galaxy Digital CEO also highlighted some significant developments in the crypto space. He pointed out that WeChat, the largest single platform globally, has just enabled Bitcoin and crypto trading. Additionally, Hong Kong has officially allowed crypto trading for retail customers through regulated exchanges for the first time. These developments, Novogratz believes, indicate increasing Asian adoption of cryptocurrencies.
Despite the current market stagnation, Novogratz remains optimistic about the future of cryptocurrencies. He anticipates that the Federal Reserve will change its tone by October, which he believes will be the catalyst for a bull run in assets like Bitcoin, Ethereum, gold, and silver. He also mentioned the ongoing AI bubble, which he described as “exciting” and “just starting,” and suggested that it could significantly impact the psychology of the market.
In terms of investment advice, Novogratz suggested that investing in Bitcoin would be a better option than a one-year T-bill, given the potential for the Fed to cut rates if the economy slows down in the second half of the year. He believes that the Fed will be hawkish until they’re not, and the moment the economy really turns, the Fed will be cutting rates really fast, which will be the catalyst for assets, especially gold, silver, Bitcoin, and Ethereum, to head higher.
Novogratz also touched upon the impact of AI on the market, stating that we’re in an AI bubble right now, and having watched bubbles his whole life, it’s a pretty exciting one, and it’s just starting. He believes that bubbles always happen around things that fundamentally change how we live, and the AI story is just starting.