Summary
- Bitcoin ended May down 8.0% – its worth month since November.
- Galaxy Digital CEO Michael Novogratz attributes the drop to a lack of large-scale buyers or institutional investors.
- Novogratz expects Bitcoin to benefit from interest rate cuts and the halving next year.
Michael Novogratz’s View on Bitcoin
Bitcoin just had its worst month since late last year but Michael Novogratz – the Chief Executive of Galaxy Digital is keeping optimistic on the cryptocurrency. Novogratz attributed the recent weakness in BTC to a lack of participation from large-scale buyers or institutional investors. But the billionaire investor talked of two recent developments this morning on CNBC’s “Squawk Box” that he dubbed meaningfully positive for the Bitcoin – WeChat enabled bitcoin and crypto trading, and Hong Kong officially allowing crypto trading for retail customers through regulated exchanges. Furthermore, BTC is still up 65% year-to-date which makes it one of the best performing assets since the start of 2023.
Rate Cuts Will Be Positive For Bitcoin
Novogratz also expects Bitcoin to benefit once U.S. Federal Reserve starts to cut interest rates which he sees likely in final quarter of this year. To that end, if given an option between investing $10,000 in Treasury Bills with 5% guaranteed return or Bitcoin, he would definitely choose BTC. According to him, if there is real slow down in economy during second half of 2023 then Fed will be cutting rates by October and crypto market will be off to races again.
Halving Impact On Price Appreciation
Further ahead, total supply of Bitcoin is set to cut in half next year which has historically been tailwind for price appreciation according to Novogratz.
Conclusion
Though bitcoin had its worst month since late last year yet Michael Novogratz still believes that it will benefit from upcoming rate cuts as well as halving that is scheduled for next year and might see good appreciation again soon enough.