Novogratz's Positive Take on Bitcoin Amid Challenging Month

Despite Bitcoin experiencing its most challenging month since late last year, Michael Novogratz, the Chief Executive of Galaxy Digital, remains optimistic about the future of the cryptocurrency.

Novogratz Shares his Thoughts on Bitcoin

Novogratz identified the absence of significant involvement from institutional investors as the primary cause for Bitcoin's recent weakness. However, during an appearance on CNBC's "Squawk Box," the billionaire investor discussed two recent developments that he considered highly favorable for Bitcoin, describing them as meaningfully positive.

In addition, Novogratz highlighted that despite the sell-off witnessed in May, BTC has managed to maintain a year-to-date gain of 65%. This impressive performance positions Bitcoin as one of the top-performing assets since the beginning of 2023.

Rate Reductions will Benefit Bitcoin

Novogratz further expressed his anticipation that Bitcoin will reap the rewards when the U.S. Federal Reserve commences interest rate reductions, a move he foresees happening in the last quarter of this year.

“If what I think is going to happen happens and we see a real slowdown in the second half of the year, the Fed will be cutting rates by October and crypto is going to be off to the races.”

In fact, the CEO of Galaxy Digital emphasized his preference for BTC over a guaranteed 5.0% return on Treasury Bills, stating that if he had to invest $10,000 at this moment, Bitcoin would be his clear choice.

“The US economy will slow. All these interest rate hikes will have an impact. The banking crisis will stop lending to small businesses which will finally show up in unemployment. It just takes a while. And so I think if we’re talking in October, the Fed will have a very different tone and that will be the catalyst for assets, especially gold, silver, Bitcoin, Ethereum to head higher.”

Looking ahead, it is worth noting that the total supply of Bitcoin is scheduled to be halved next year, a factor that has historically acted as a positive force driving price appreciation for the cryptocurrency.

At the time of writing, Bitcoin was priced at $27,178.37, experiencing a 0.37% rise, and Ethereum was trading at $1,904.75, maturing at a 0.74% surge, in the past 24 hours.

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This information is for educational purposes only and does not constitute investment advice. No person should rely on it to make any investment. Investing carries risks, including the loss of capital. All opinions expressed are subject to change without notice. Past performance is not indicative of future results. Always seek the advice of a licensed investment professional before making any investment.