Bitcoin bull and billionaire investor Mike Novogratz warned Jerome Powell’s second Fed stint could decelerate the crypto market, Business Insider reported. Powell might feel freer to tackle inflation and put some limitations on monetary policy, which would slow crypto, stocks, and all other assets down.
On Wednesday, Novogratz told CNBC:
"The macro story has changed a little bit…people are getting pretty bearish (on cryptocurrencies). Powell gets reappointed, and so maybe it allows him to act more like a central banker than a guy that wants to be reappointed. We have inflation showing up, you know, in pretty bad ways in the US. Is the Fed going to have to move a little faster? That would slow all assets down. It would slow the Nasdaq down. It would slow crypto down, if we have to start raising rates much faster than we thought."
Earlier this week, Powell was nominated by President Joe Biden to serve for a second term as chairman of the Federal Reserve. He helped the US economy cope with the Covid-19 crisis, overseeing the biggest monetary stimulus the country’s history.
Fed grappling with highest inflation rate in 3 decades
The Federal Reserve has cut its bond purchase rate. According to minutes from its last monetary policy session, officials are open to reducing quantitative easing more rapidly. According to FedWatch, investors believe the Fed could raise interest rates in May next year.
Fed funds lifted many top 20 cryptos
Bitcoin, Ethereum, Dogecoin, and some other top 10 cryptocurrencies were lifted by the flood of money from the Fed in the last 18 months. In the past, Novogratz has predicted Bitcoin would reach as much as $100,000 by the end of 2021.
Bitcoin only slightly bullish, if at all
At this moment, his prediction doesn’t seem very likely to materialize. On Thursday, the king of crypto gained almost 4% and was trading for $58,667 on the Bitstamp exchange. At the time of writing, it was changing hands for just under $54,200.
Novogratz, a former hedge fund manager, says there’s still lots ‘to be excited about’ in the crypto market.
