For US entrepreneur Mike Novogratz, this "cryptowinter" could end in October 2022. From then on, according to him, "bitcoin will separate from equities and lead the markets."
Galaxy Digital founder and CEO said recently during his attendance at the Consensus 2022 conference. “My hope is that, by the fourth quarter, the economy will slow enough to cause the Fed to say we will take a break, and then you will see the start of the next cryptocurrency cycle, ”he said to justify his prediction.
Novogratz, who is also a bitcoin investor (quotation BTC) and digital assets, he is convinced that by then "rates will be 5% in the United States". For this reason, he hopes that "cryptocurrencies can decouple".
BTC exhibits some price correlation with traditional markets, particularly the NASDAQ technology equity index. As early as January of this year, the media reported that "bitcoin and traditional markets are dancing to the same beat".
More recently, in mid-May, correlation with the S & P500 and NASDAQ indices was reported to have reached a new all-time high. The graph below, produced by TheBlockCrypto, shows how this correlation, while decreasing slightly since then, remains high.
The cryptocurrency industry would struggle to recover
While optimistic about the price of the cryptocurrency created by Satoshi Nakamoto, Novogratz suggests that the cryptocurrency industry, which is generally not having a good time, will struggle to recover. He believes that many companies will not be able to survive the current crisis.
It is a phenomenon that is already being observed, with a wave of layoffs in companies in the sector. The Coinbase, Gemini and Bitmex exchanges are among the companies that have announced the decision to fire employees or not to hire other staff at least until the end of 2022.
The Latin American stock exchanges Bitso and Buenbit were also forced to reduce staff. Federico Ogue, Argentine entrepreneur and CEO of Buenbit, said in late May: “In a new global context, we are redefining our strategy to become more robust and efficient.
Galaxy Digital, the Novogratz company, has not escaped the crisis and its shares (traded with the GLXY ticker on the Toronto Stock Exchange, Canada) have fallen by about 81% from the all-time high reached in November 2021.
The entrepreneur predicts that the recovery of the bitcoin market and the industry that has grown around it will not have a "V" shape. Instead, he predicts a combination of ups and downs and side markets until "a new narrative emerges" which, as mentioned, could take place in October of this year.
Meanwhile, Novogratz remains optimistic and, at least for now, his company has not joined the wave of layoffs.
Why am I still hiring people and am I optimistic? Because I see the adoption of [bitcoin and cryptocurrencies] in real life - Mike Novogratz, CEO of Galaxy Digital.
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