Mike Novogratz, CEO of cryptocurrency investment firm Galaxy Digital, predicted that October could see some reversal for stocks amid the Fed’s steady interest rate hikes in an effort to contain high inflation.
According to Novogratz, the first few days of October showed positive signs as the market continues to face instability, he said during CNBC’s Squawk Box presentation on October 4.
“I think October will be a month of reflection, right? I’ve already seen the first two days, you know, a much lower yield, and stocks are much higher. “But this does not make the imbalances disappear.”
Interest rate increases are likely to continue
At the same time, Novogratz said the Fed is likely to remain tough, and given that there is still a lot of instability in the market, the central banking system may similarly interact with the Bank of England (BoE).
The Bank of England, in a rare intervention, has chosen to focus on large-scale purchases of British government bonds to stabilize the market. Previously, the Foundation raised interest rates by five basis points, the highest since 2008.
“The Fed will certainly raise interest rates several more times. The market has inhaled that if the world starts to collapse, the Fed will have to react in the same way as the Bank of England. ”
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Overall, rising inflation and Fed tightening policies affect stocks and the cryptocurrency market. However, there are no indications that the Fed intends to cut interest rates because such a move is likely to hurt efforts to fight high inflation.
The Fed’s influence on encryption
It should be noted that Novogratz, also an encrypted bull, noted that the prospects of assets such as Bitcoin (BTC) are directly linked to the Fed’s actions. As reported by Finbold, the former hedge fund manager expressed doubts that Bitcoin would have a concessional load amid continued interest rate increases.
Despite the patch, Novogratz confirmed that Bitcoin is likely to trade at $500,000 within the next five years. However, he said that for cryptocurrencies to rise, the Fed would need to calm down with its policies.