Mike Novogratz: “Crypto was created for this point” as banking crisis, de-dollarization escalate
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(Kitco News) – Bullish sentiment is rising among the crypto community as the ongoing banking crisis, the Fed’s inability to deal with inflation, and the growing de-dollarization movement have many proponents declaring that crypto’s time has come.
Chief among those expressing a positive outlook is Mike Novogratz, the billionaire owner of Galaxy Digital, who says “the market feels strong” and that crypto prices are likely to rise in the coming months.
Novogratz made the comments during Galaxy Digital’s Q4 2022 earnings call on Tuesday, and at one point considered calling his remarks “a tale of two cities, because it feels like overseas crypto is really doing amazing, and domestically it seems to be a regulatory attack.”
Instead, he decided to call his pitch “the good, the bad and the ugly.”
“Let’s start with the good… This is crypto’s moment,” he said. “Crypto was in many ways created for this point, right? Satoshi Yakamoto was worried way back in 2009 about the collapse of the legacy financial system. He worried about populism infecting our politics and a constant printing of fiat currencies and a deterioration of money, and created Bitcoin.
Novogratz went on to compare the money printing that has occurred since 2008 to a “debt orgy” that has led to a debt-to-GDP buildup that “may be unsustainable.”
While the global banking system has begun to falter, Bitcoin and Ethereum have been the two best-performing assets over the past three years, he noted, adding, “so whatever Jamie Dimon wants to say, whatever the Biden administration wants to say, they De just get it wrong, and the world knows it.”
The “bad”, in Novogratz’s view, revolves largely around the regulatory regime in the US, which he said “is very tough.”
“It made great progress until FTX, and then the Democrats felt stupid that they were so close to Sam Bankman-Fried, from the SEC to the CFTC to the Biden administration, and have used this one example of terrible fraud and being snookered by a guy in Bermuda shorts to just say the whole thing is bad,” he said.
After firing off a list of recent actions, such as weekly Wells filings from the SEC, Novogratz suggested the result will be a backlog of lawsuits, which he said is not good for innovation and pushes crypto companies offshore.
Despite these concerns, “crypto prices are higher, activity is moving up, and we see a pretty promising future,” he said.
As for the “ugly,” Novogratz pointed to Galaxy Digital’s share price, which is lower despite Bitcoin climbing higher and improving fundamentals at the company.
Going forward, the Galaxy Digital boss has hope for the crypto market as a whole when the current breakdown subsidies. “I’m surprised to hear myself say this given where my thinking was at the end of December, but it wouldn’t surprise me if we were significantly higher three months, six months, nine months from now.”
He also suggested that the heavy-handed approach by the SEC and CFTC in recent months is the result of embarrassment as both agencies were close to former FTX CEO Sam Bankman-Fried. “In a lot of ways, the whole group got egged on the face through this whole guy, and it just allowed this vacuum, and I don’t think it’s going to last forever.”
In closing, Novogratz indicated that macro hedge funds around the world are taking note of the latest developments, which has led them to have a positive view of both gold and Bitcoin. “This China-US war with Russia as a proxy is going to push the gold narrative, and the digital version of that is Bitcoin, and so I think from a macro investor perspective, it’s very clear.”
Rich Dad Poor Dad author Robert Kiyosaki agrees with Novogratz that now is a good time to shop for assets that will maintain their purchasing power amid rampant inflation, including gold, silver, BTC and designer goods.
BUY til YOU DROP. Retail prices are falling. Rising interest rates kill capitalism. Rich brands on sale. Buy before systemic inflation is under control. Systemically, inflation is not transitory. Buy Prada, Panerai, Polo, gold, silver, BC before the brands become expensive. F’ poverty.
— Robert Kiyosaki (@theRealKiyosaki) March 29, 2023
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