Mike Novogratz withdraws from his Bitcoin $500,000 call, blaming the Fed for rate hikes

  • Mike Novogratz believes it will take longer than he previously expected for Bitcoin to reach $500,000.
  • Federal Reserve rate hikes have depressed the token’s value this year, Galaxy Digital’s CEO said.
  • Novogratz previously predicted that Bitcoin would hit $500,000 within five years.

According to Mike Novogratz, Bitcoin now faces a tougher path to eventually reaching $500,000 – with Galaxy Digital’s CEO backing down from his earlier prediction that the token would reach that level within five years.

Novogratz said in a recent interview that the Federal Reserve’s monetary tightening campaign, led by Chairman Jerome Powell, was the key factor that caused Bitcoin’s price to fall 63% this year to just under $17,000.

“No, not in five years,” he told Bloomberg TV when asked about a previous prediction that Bitcoin would hit $500,000 by 2027.

“The biggest shift that has taken place, and the real reason bitcoin has fallen from $69,000 to nearly $20,000, is that Jay Powell decided to find his central bank superpowers and curb inflation with a series of rate hikes over the hitting heads,” added Novogratz.

The Fed has hiked interest rates by a whopping 75 basis points at each of its last four meetings to dampen inflation, which hit a forty-year high before moderating to 7.7% in October.

That has weighed on economic growth and tech stocks, as well as digital assets — which are now mired in a brutal slump that some have dubbed crypto winter.

The industry has also faced a string of high-profile bankruptcies, including wealth manager Three Arrows Capital, lending firms BlockFi and Celsius, and Sam Bankman-Fried’s exchange FTX, which collapsed last month after a solvency crisis.

According to Novogratz, these implosions will not weigh on Bitcoin’s long-term price.

“The Fed is in control and they’re doing a damn good job and that’s the main reason crypto went under,” he said. “The rest of this malarkey that we had between Three Arrows and BlockFi and Celsius and all these companies that were either badly managed or fraudulently run is certainly damaging to the overall confidence in crypto.”

“But that too will pass – they will be swept into the dustbin of history and the industry itself will emerge from this having learned lessons and you will see the price come down again,” Novogratz added.

Continue reading: Sam Bankman-Fried is urging crypto investors to put their money on exchanges that don’t do business like FTX

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