Crypto billionaire Mike Novogratz predicts that the US economy will quickly plunge into a wild recession. He also warned that stocks could drop another 20 percent. He warned that asset prices may not recover until the US Federal Reserve (FED) gets inflation under control. Here are the experts’ latest comments on the market…
Market comment from a crypto expert
As Cryptokoin.com , known for his crypto money investments, Mike Novogratz was the latest name to share his thoughts on the falling market. The senior investor and CEO of Galaxy Digital suggested that the crypto crash will help end the excessive leverage, reckless speculation and aggressive conservatism in the space. He made his comments in interviews with CNBC and Bloomberg, and at the Morgan Stanley conference this week. Here are 12 key narratives from Novogratz’s speech:
- “It’s hard not to underestimate the huge impact the response to COVID-19 has had on all assets. We pumped so much liquidity into the markets that it was insane. We’ve never seen anything like this. We were throwing trillions of dollars like matchsticks.”
- “The 12-year bull market does not end with the 4-month bear market. That’s not how things work.”
- “The only way to kill inflation at this level is to plunge the economy into a deep recession.”
- “A soft landing is impossible. The economy will quickly fall into recession. You will see that the economy suddenly stops. That’s what the Fed has to do to lower inflation.”
- “As long as the market believes the Fed is behind the curve and will catch up; You will see that asset prices are under pressure.”
Bitcoin and Ethereum should hold these levels
- “I don’t think we’ve seen the bottom of the market yet. Stocks could drop another 15-20 percent. I think we’re much closer to the bottom in crypto. Ethereum should hold around $1,200. Bitcoin should hold $20,000 or $21,000.”
- “We are going through a process that feels like a Long-Term Capital Management moment in Crypto.” (Here, Novogratz is talking about a highly leveraged hedge fund that exploded in the late 1990s.)
- “The really big players, borrowing money from everywhere, have a knock-on effect. This is currently burning the system. In my opinion, mostly burned, but these fires continue until they are extinguished. Oxygen has run out. If you have a lot of leverage, you have to be a diamond-handed player to sustain all this.”
- “Confidence in the market has decreased. It will take some time for Humpty Dumpty to get back together.”
- “During the COVID bubble, Robinhood and others spread the idea that everyone should be an investor. Many people do not have the education to be investors. He doesn’t understand risk management. There was a lot of foam and it was mostly taken off the market.”
- “Crypto is a tribal thing. I literally get death threats when I degrade any ecosystem. There is almost an irrationality in the way people invest. Not just to crypto, but all over the planet. This will disappear. Not entirely, these communities are resilient. But I think it will be much less important.”
- “Bitcoin will pull the markets back from this Fed tightening. The moment the Fed gets startled, the moment Powell pauses, you will see Bitcoin bursting above.”
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