Crypto investors have had a difficult start to the week. For the first time in 18 month, the total market cap fell below $1 trillion. Bitcoin led the market crash. It fell to $21,000 Monday and Ether (ETH), to $1,093.
After news broke that the U.S. Federal Reserve might raise interest rates this week and increase the likelihood of a recession, the sell-off grew.
Novogratz: Bitcoin will bottom at $20k
The U.S. stock markets also fell to the news. However, the crypto market suffered most. Many investors panicked as they feared that Bitcoin and ETH would plummet below $20,000 and $1,000 respectively if the chaos continues.
Mike Novogratz is the founder and CEO at crypto investment firm Galaxy Digital. He believes that the top cryptocurrencies will continue to be strong at these levels.
Morgan Stanley Financials Conference, Monday. The billionaire investor pointed out that the crypto market is closer than the stock market to the bottom. He thinks the equity market is at risk of plummeting, while Bitcoin and Ether will bottom out at $20,000 and $1,000 respectively.
Ethereum should have around $1,000, and right now it is $1,200. Bitcoin is approximately $20,000, $21,000, and it’s $23,000. So you are closer to the bottom than you are to stocks. I believe that stocks will have an additional 15% to 20% [decline].” Novogratz stated.
In light of the Fed’s soaring rates, he said that it is not the best time to “deploy lots capital”. This would change if the Fed recognizes that the economy is in crisis and reduces interest rates.
The Future of Cryptocurrency
Mike Novogratz, meanwhile, has been a bullish investor in Bitcoin and crypto-assets. BTC proponent Mike Novogratz stated earlier this year, that blockchain will transform the world and crypto will transform financial services like never before.
Novogratz is still bullish on crypto, but he believes that many crypto hedge funds won’t survive the bear market. He estimates that around two-thirds (or more) of the 1,900 hedge funds in the sector will be shut down as the crypto winter gets worse.
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