Investor

Mike Novogratz – Billionaire Investor Tells You How Long The Bitcoin And Crypto Bear Market Will Last | by Jayden Levitt | October 2022

It can help you plan your next Crypto purchase

Source – Screenshot CNBC Live

Who is Mike Novogratz?

He’s a former Goldman Sachs employee whose party antics led to his departure. Or, as he puts it.

“Party like a rockstar.”

He also claims to be the only guy with Bitcoin and Luna Tattooed on his body.

The latter, I’m sure he regrets. A few weeks after getting the Luna Tattoo, Luna lost all of its value after a prominent wielder foiled her Luna, causing a death spiral and massive sales.

Luna claimed to be an algorithmic stablecoin pegged to the US dollar, proving anything but stable.

He has now officially gone to cryptocurrency heaven.

Novogratz said in 2017 that 20% of his net worth was in Bitcoin and Ethereum and said he made $250 million from cryptocurrency from 2016 to 2017.

He is currently CEO of Galaxy Investment Partners, which focuses on investments in cryptocurrency. It is also one of the few cryptocurrency companies required to publish financial results.

In the first nine months of 2018, the company lost $136 million in cryptocurrency trading.

Novogratz says the Federal Reserve’s interest rate hike caused the selloff.

“Since the Fed decided to try to crush inflation by aggressively raising rates, the most aggressive rate hike of our lifetime, Bitcoin has been sold off along with other assets.”

He thinks bitcoin has done better than most other assets and expects the cryptocurrency market to pick up when we finally see a rate hike conclusion.

Novogratz is probably right if you take a snapshot of the last three months.

Here’s how Bitcoin fared against other assets, like the S&P500; It seems to run parallel and almost pegged to the price of the 500 largest listed US companies.

  • S&P 500 – upper orange line
  • Bitcoin – bottom candle chart
Source – Commercial view

The Bitcoin maximalist is looking at a short-term snapshot of price action when he says Bitcoin is doing well against other assets.

It does not reflect the full picture.

If you analyze beyond a 3-month time horizon, you may see a steeper decline in price action.

Particularly in mid-June after the Fed announced that interest rates would rise by 0.75%. The S&P 500 rose, while Bitcoin fell around 20%.

  • S&P 500 – upper orange line
  • Bitcoin – bottom candle chart
Source – Commercial view

The cryptocurrency community will argue that the steeper price declines are due to Bitcoin having seen larger price increases.

It is a fact that Bitcoin has been the best performing asset of the last decadebut it’s also more volatile, so I don’t see how the price correlates with the stock market, as some claim.

He thinks it’s crazy that people believe Bitcoin is not a good inflation hedge.

Mike Novogratz:

“It went from $10,000 to $70,000 when the Fed produced inflation – the most aggressive rate hike in history.”

“If we finally hit the break, we will see a bitcoin rally at some point.”

Here’s how long Novogratz thinks it has until we see a market rally (as of press time).

“The bearish case is that we have 2-6 months left of this pain, and the bullish case is that the market starts to break.”

We see a lot of this breakage in crypto and in the rest of the world.”

Novogratz thinks the deleveraging that happened a few months ago meant that most people who needed to sell and deleverage sold.

“You might see much more moderate prices. Things take off when there’s a good story and then come back.

There are far fewer sellers but also far fewer new buyers.”

Novogratz says we need regulation and hopes something happens before the next US election.

I am very optimistic about the long-term outlook for Blue Chip cryptocurrencies and the stock market.

There is no doubt that next year will present fantastic buying opportunities.

Short term. Nobody knows.

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This article is for informational purposes only; it should not be considered financial, tax or legal advice. Consult a financial professional before making major financial decisions.