Michael Novogratz: “The recovery of the cryptocurrency market depends on the actions of the Fed”

Galaxy Digital CEO and cryptocurrency enthusiast Michael Novogratz believes that the recovery of the digital asset market could take a long time and is highly dependent on the actions of the US Federal Reserve.

AT interview with journalists from Bloomberg, Michael Novogratz noted that against the background of the general financial crisis, one should not expect a quick recovery in the prices of bitcoin and ether. In the coming months, the US Federal Reserve will increase the base rate, Novogratz believes, which will hinder the growth of the cryptocurrency market. But when the US Central Bank finishes raising rates, the money of large hedge funds will flow into bitcoin and ether:

“The moment the Fed stops… I think you will see a lot of traditional macro funds that have had a great year start buying bitcoin. We too will begin to increase our position at this point.”

One of the reasons for the current weakening of the rates of the leading cryptocurrencies, the CEO of Galaxy Digital called too much margin positions. Moreover, from the side of large players, such as Three Arrows Capital. This fund appears to have failed to hold collateral for margin positions, resulting in their closing. And such margin calls lead to massive sales and a rapid decline in the market.

Novogratz expects that many cryptocurrencies and not only companies will declare bankruptcy in the near future. At the same time, the CEO of Galaxy Digital continues to look positively at the cryptocurrency industry. He compared it to Zoom Meeting, which, despite significant losses, is unlikely to leave the market. And cryptocurrencies, despite the fall, will not leave the financial scene anywhere.

Earlier, a cryptocurrency enthusiast said that bitcoin is unlikely to fall below $20,000, and ether below $1,000.