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Bitcoin will always be an investment
A stable dollar is essential
Global Political Factors Drive Volatility
Bitcoin started as an experiment and in a short time (13 years) became the best brand in the world – and decentralized, without a CEO, said Mike Novogratz, Founder and CEO of Galaxy Digital at Bitcoin 2022 in Miami.
Cryptocurrencies have corrected sharply over the past few weeks. Speculative investors are now trading CFDs on the world’s most popular cryptocurrencies with leverage and 24/7 availability with Plus500.
77% of retail investor accounts lose money when trading CFDs with this provider. You need to carefully consider whether you can afford to take the high risk of losing your money.
Bitcoin probably the best brand ever created in a minimum of time 👏
@novogratz #Bitcoin2022 pic.twitter.com/h8X0sDTWiI
– CryptoNews Canada (@CryptoNewsCAN) April 7, 2022
The end of the Fed’s ultra-loose interest rate policy had been feared in the crypto market. However, the reversal of interest rates in the United States initiated by Jerome Powell had a comparatively positive effect. This reinforces Novogratz in his prediction that the price of Bitcoin will settle between US$30,000 and US$50,000. Global political factors such as geopolitical risks or rising interest rates are responsible for the high volatility. However, Bitcoin’s success is mostly tied to a stable US dollar.
bitcoins and dollars
Cryptocurrencies have recently become particularly relevant in the context of the war in Ukraine. Due to decentralization, cryptocurrencies are still available even if access to traditional banks is blocked, according to Novogratz. However, Bitcoin is not a way to circumvent sanctions. The reason for the creation of Bitcoin is rather the transparency and traceability of transactions on the blockchain.
Another global political dispute that could have a massive impact on the US dollar is that of the island nation of Taiwan. China has exerted military pressure on Taiwan for several years, but has yet to deliver the final blow due to international pressure. It has been suspected for some time that the Chinese government may dispose of its US dollar reserves before attacking Taiwan. This would greatly accelerate the dedollarization of the global economy.
Novogratz highlights the importance of the US dollar for the global economy, but also for Bitcoin. He prayed that the Fed would not screw up current interest rate policy because stability and cohesion in the Western world could only be achieved with a stable dollar that did not rise immeasurably.
To the Moon
Novogratz predicts the Fed will raise rates by 50 basis points. The Bitcoin bull sees the moment when Bitcoin should go to the moon when the US economy has slowed down and the Fed eases its interest rate policy again.
Bitcoin has suffered significant losses since its all-time high on Nov. 10, 2021, which doesn’t make Novogratz any less optimistic. He also points out that the crypto industry is a growing industry and his company Galaxy is a growing company. He therefore still considers the US$500,000 mark realistic for the oldest cryptocurrency, as he confirmed in Miami.
While Ethereum establishes itself as a currency for the NFT art market, Novogratz does not see Bitcoin as a currency to pay for (everyday) things. The Bitcoin billionaire said in an interview with CNBC that the crypto veteran remains a pure investment.
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