Galaxy Digital CEO Mike Novogratz Says It’s Time to Invest in Bitcoin and Gold Amid Economic Instability

The US economy is facing a potential credit crunch and is heading towards a recession, according to Mike Novogratz, CEO of Galaxy Digital. Novogratz warns that this is the time to invest in bitcoin and gold.

He believes that this is precisely the reason why cryptocurrencies were created, as governments tend to print too much money during tough times, which leads to economic instability.

“If there was ever a time to be in bitcoin and crypto, this is why it was created, in that governments print too much money whenever the pain gets too great, and we’re seeing that,” he told CNBC Wednesday.

Recently, regulators shut down Silicon Valley Bank and Signature Bank, while Silvergate Bank announced that it would wind down its operations and liquidate its business. Moody’s, the ratings agency, also slashed its outlook on the US banking system. Novogratz believes that the commodity market is indicating that the US is heading towards a recession, and this will lead to a credit crunch.

Novogratz also believes that the Federal Reserve will cut interest rates sooner than anticipated, as the banking crisis has changed the public’s “psychology.” He notes that there is contagion and that people are learning from the SVB crisis. He predicts that Americans may start to rely on just four or five depository institutions.

While stocks may decrease in the short-term, Novogratz anticipates that they will bounce back with the Fed’s shifting policy. He believes that central bankers will pause at the March meeting, as it has become apparent that something broke in the economy this week. Novogratz warns that a dovish hike for credibility’s sake would be a significant policy error.

The value of bitcoin surged to a nine-month high on Tuesday, hovering around $24,337 on Wednesday, and has rallied approximately 46% year-to-date. Gold rallied 1.37% on Wednesday to about $1,937.50, and Brent crude oil, the international oil benchmark, fell by 5.6% to trade around $73 a barrel.

Novogratz’s warning that the US is heading towards a credit crunch and potential recession should not be taken lightly. This highlights the importance of diversifying investments, and investing in assets like gold and bitcoin, which have shown resilience during economic downturns. The upcoming months will be critical, and investors should keep a close eye on developments in the US economy.

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