Is Bitcoin really an asset that is not correlated with what is happening in the world? Galaxy Digital CEO Mike Novogratz says the cryptocurrency remains linked to the movements we see in the macroeconomic sphere. During the conversation with CNBC, he was also asked under what circumstances the current bubble on digital currencies would burst.
Novogratz: the end will be when the stock bubble bursts
Novogratz says it is expected that Bitcoin will eventually start to depreciate as the stock market continues.
– If the speculative bubble [na akcjach] will break, Bitcoin will fall for a while. Yes, there is too much correlation you see in people’s behavior with risky assets. If you made a lot of money [na danym rynku] and you will lose a lot of money [na innym rynku], at some point you will want to take profit from where you made the money. So if the S&P index drops by 20 percent. in the next three days, Bitcoin will lose too – He said.
Despite this correlation, Novogratz believes that Bitcoin will eventually mature into an asset less affected by significant stock market declines as rising millennials and the Z-generation view BTC as a hedge against economic uncertainty.
– There is an adoption cycle where institutions want it [BTC] buy because it’s really hard to find an escape from central banks and governments. It is really hard to find a way out of this gigantic deficit that keeps growing and growing at an ever faster pace – added. – This is why millennials and Generation Z intuitively buy Bitcoin because they know they have a problem. Baby boomers have eaten all future lunches in many ways building up these gigantic deficits, so I think Bitcoin will remain correlated with risky assets in the short term, but this correlation will break down over time and will continue to do so [w dół]as more and more people are joining this community [kryptowalut] He explained.
BTC is like a virus
Novogratz also highlights the viral nature of Bitcoin. He says we all need to be ready now for the imminent full entry of institutional investors into the cryptocurrency market.
– The viral nature cannot be underestimated [BTC i] how many people fall into the Bitcoin market. I find it shocking how many institutions are now trying to introduce Bitcoin into their wallets – added.