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

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

In an interview with journalists from BloombergMichael Novogratz noted that against the backdrop of the general financial crisis, one should not expect a quick recovery in the prices of Bitcoin and Ethereum. 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, money from large hedge funds will flow into Bitcoin and Ethereum:

“The moment the Fed stops... II think you'll see a lot of traditional macro funds that have had a great year start buying Bitcoin. We will also begin to increase our position at this point.”

One of the reasons for the current weakening of exchange ratesleading cryptocurrencies, the CEO of Galaxy Digital called too large a share of margin positions. Moreover, from large players such as Three Arrows Capital. This fund appears to have failed to maintain collateral for its margin positions, leading to their closure. And such margin calls lead to massive sales and a rapid drop in the market. 

Novogratz expects that in the near future manycryptocurrency and other companies will declare bankruptcy. At the same time, the CEO of Galaxy Digital continues to have a positive outlook on the cryptocurrency industry. He compared it to Zoom Meeting, which, despite significant losses, is unlikely to exit 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 Ethereum - below $1,000.