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.

#bitcoin #btc #gold #MikeNovogratz #investment

This article was republished from azcoinnews.com

⬆️ The Fed raised the rate by 0.25% to 5.25%

The Fed will continue to further reduce the balance sheet under the plan. (This should have a negative impact on the markets).

The Fed has removed the signal about the need for further rate hikes, but does not give clear hints of a pause. He also notes that today no decision was made to pause. But, nevertheless, it hints that it is possible that the cycle of increase is already over.

FED is sending a signal that it is not going to lower the rate yet, it wants to keep it at a high level for some time.

FED again does not want to talk too much about the recession.

FED says banks are strong and the US economy will not let you down 🤡

Powell says it's important to raise the debt ceiling, but not just raise it, raise it on time.

Comment from our team:

At the moment, the rate was raised to levels of 2007, which was later, you all know very well… Now there is a whole combination of factors for the market to fall.

However, there is enough liquidity in the market that has been created over the period from 20-21, so the markets cannot collapse, as a huge amount of money buys out drawdowns, since inflation, although it has slowed down, continues to grow from month to month.

📉 We are negatively looking at Sp500 in the medium term.

The decline in revenue and profits of companies due to the recession will have a negative impact on EPS. Buybacks, which have been a major driver of stock growth in recent years, could be hit by rising taxes.

❓ For Bitcoin, the situation is very uncertain.

In history, $BTC has not yet gone through a recession. But we believe that eventually bank failures will lead to a large flow of funds from private investors to Bitcoin, which will lead to its growth. But sharp drawdowns cannot be ruled out.

📈 Looking positively at gold.

It is currently trading at 3-year highs. The level of $2000 has already acted as resistance three times, but today we see how gold has broken through this mark. In the near future we can see a sharp increase in this asset. Any drawdown in gold is recommended to be aggressively buy $PAXG .

We have already given ideas for Bitcoin and Gold, if you are interested in getting more profitable ideas - take a look at the profile header 🎩

#investideabinance #gold #btc #sp500 #crypto2023