Jerome Powell getting a second term as Fed chair has changed the crypto macro sentiment, according to Mike Novogratz
He says Fed acting on inflation with speed could slow down markets, including cryptocurrency
Despite the potential for a price slowdown, institutional investors are still bullish on crypto, he told CNBC’s “Crypto Night in America”
Galaxy Digital CEO Mike Novogratz believes that Fed Chair Jerome Powell’s second term could spell some bad times for cryptocurremcies in terms of the market.
According to the billionaire investor, among the biggest in the crypto space, Powell’s nomination could see the macro outlook of crypto flip south as more people adopt a bearish view of the industry.
In an interview with CNBC’s “Crypto Night in America”, Novogratz said the Fed Chair’s reappointment might see him “act more like a banker,” suggesting that Powell may take a stance markedly differing from one who might seek reappointment.
The investor says the current situation with rising inflation in the US and across the world could force the Fed to act. If the US central bank moves to hike interest rates sooner than expected as suggested in the recently released Fed meeting minutes, then not only will it hurt stocks but also have ripple effects in the crypto markets.
“That would slow all assets down. It would slow the Nasdaq down. It would slow crypto down, if we have to start raising rates much faster than we thought,” Novogratz told CNBC.
The outlook for crypto may worsen in the short term given major cryptocurrencies like Bitcoin and Ethereum are already struggling with downward pressure.
Despite this, the Galaxy Digital boss says big money is still destined for crypto investments.
According to him, the crypto community could see institutions invest staggering amounts of money into Bitcoin and other crypto projects. Among those already looking at the burgeoning investment space are sovereign wealth funds and global pension funds, he added.
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