Bitcoin is going to be a reflection of what citizens think about the government’s handling of the economy, former hedge fund manager Mike Novogratz believes. In an interview on Monday, he talked about the NFT craze, the future of Bitcoin’s price, and why he isn’t worried about the price dip.
Novogratz, the founder, and CEO of Galaxy Digital shared his thoughts on CNBC’s Squawk Box. He revealed his belief that Bitcoin’s rise is a reflection of the citizens’ loss of trust in a government that prints an excessive amount of money.
“We’re in this once-in-a-lifetime secular shift where we have something that wasn’t an asset class becoming an asset class. So every insurance company, and pension fund and endowment and money manager needs to get it on the books,” he told the host, Andrew Ross Sorkin.
He added, “I think after that, Bitcoin will literally be like a report card for how citizens think the government is managing their finances.”
According to the former Goldman Sachs asset manager, people will be monitoring Fed chair Jerome Powell and Treasury Secretary Janet Yellen. If they feel the two can’t steer the U.S from the debt, inflation, unemployment, and money printing cycles it’s in, they will continue to acquire Bitcoin.
Novogratz pointed to the $1.9 trillion stimuli which the Biden government-approved recently as proof that all’s not well. The stimulus was an additional deficit to a government that’s struggling with “another giant deficit,” he stated.
“We are in uncharted territories on how much money we are printing and Bitcoin is a report card on that.”
I’m not worried about the recent dip: Novogratz
Bitcoin set a new all-time high just three days ago, a year since the devastating Black Friday crash. However, since then, it has shed off over 9% and is currently trading below $56,000. This slight dip doesn’t worry Novogratz in the slightest.
The Wall Street veteran believes that this was due to a surge in retail interest over the weekend. One of the key reasons behind this interest was the stimulus checks that will start rolling in this Wednesday.
“The stimulus checks are coming. People are excited about that. A lot of stimulus checks are going to young people who want to buy Bitcoin,” he remarked.
The downside to this retail interest is that if any slightly negative news pops up, they panic and sell. This time, it was the news that India was planning on banning Bitcoin. Novogratz is confident that once the institutional investors get to their desks, the market will stabilize.
Nonetheless, market forces will catch up with Bitcoin when it hits very high prices. Once it surges to $100,000 or $200,000, it will be much more difficult for Bitcoin to hit 500% spikes, as it has done in the past five months.
Aside from Bitcoin, Novogratz dived into the newest craze in the industry – non-fungible tokens (NFT).
“The NFT market is an extension of crypto. If Bitcoin was the first digital money you couldn’t counterfeit, we now have that same concept going on in into art, into IP.”
As ZyCrypto reported, an NFT of digital art by the renowned artist ‘Beeple’ sold for $69.3 million.