Mike Novogratz, former CEO of Goldman Sachs and CEO of Galaxy Digital, has warned that Federal Reserve Chairman Jerome Powell could slow the crypto market in his second term in office.
Novogratz said the “macro story has changed a bit” and added that Powell’s reappointment might allow him to “act more like a guy who wants to be reset.”
“If we have to start raising rates much faster than we thought, it will slow down all assets including the Nasdaq market and cryptocurrencies,” he said.
Mike Bailey, Director of Research at FBB Capital Partners, also commented on the impact of Powell’s second term in office on the crypto industry.
Recently, he argued that for “fanatic crypto bulls,” another term from Powell might provide some confirmation bias, since these investors often view cryptocurrency as a hedge of the Fed’s loose policy.
On the other hand, Douglas Bonbarth – president of financial advisory firm Bone Fide Wealth – commented on the uncertainty of how markets would react without additional support from the Federal Reserve.
Novogratz entices funds to put money into crypto
Meanwhile, Novogratz remains bullish about the future of cryptocurrency in general by saying that the scale of institutions that Galaxy sees moving into space has been staggering.
“I was on the phone with one of the largest sovereign wealth funds in the world today, and they made the decision based on going forward to start investing money in crypto,” he said.
“I’ve had the same conversations with the big US pension funds.”
Microstrategy CEO Michael Saylor recently said that Bitcoin will grow 100 times into a $100 trillion asset class.
In May, investment bank Goldman Sachs said that fear of losing (FOMO) was driving institutional investors into Bitcoin.
US President Joe Biden recently announced that Jerome Powell will serve his second four-year term as Chairman of the Federal Reserve, while Governor Lyle Brainard, who was among the candidates for the prestigious position, was promoted to Vice President.