‘I’m not nervous in the medium term but we’re going to have a lot of volatility,’ says crypto bull Novogratz, as bitcoin adds to Fed-fueled tumble
Crypto was turning out to be an unlikely casualty in the downturn sparked by minutes from the Federal Reserve that turned out to imply a more aggressive approach to tightening from the central bank than had been expected.
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Bitcoin BTCUSD,
At last check, bitcoin was changing at $43,063, down more than 7% and ether ETHUSD,
However, Galaxy Digital GLXY,
“I’m not nervous in the medium term but we’re going to have a lot of volatility in the next few weeks,” Novogratz told CNBC during a Thursday morning interview.
He said that institutions continue to be bullish on crypto and said that he his expecting more traditional companies to make their foray into the nascent industry by putting some portion of their balance sheets into crypto.
The Galaxy Digital exec said that he estimates that he sees a bottom for bitcoin at around $38,000 or $40,000.
On Wednesday, bitcoin added to a longer-term trend lower, dipping after minutes from a December meeting of the Federal Reserve indicated that inflation readings and tight labor conditions could warrant an interest-rate increase “sooner or at a faster pace than participants had earlier anticipated.” The minutes, from the Dec. 14-15, also indicated that the Fed may start to shrink its $8.8 trillion balance sheet “relatively soon,” after the completion of its tapering and interest rate increases, which could start as soon as March.
The move lower in bitcoin coincided we a deepening slide for a segment of technology that tends to be pressure by higher borrowing costs because such companies tend to be more growth focused that profit focused.
Novogratz described the slump as a “pullback” and said that crypto’s recent uptrend is “too much of a movement” to derail the longer bullish outlook that many fans envision for assets underpinned by distributed-ledger technologies.
