By the conclusion of the week, a dismal cloud hung over cryptocurrencies, even as the Bitcoin conference in Miami reached its third day.
On Friday, April 8, Bitcoin values continued to fall after plunging at the start of the week, and have already lost nearly $4,000. At the time of writing, the pioneer cryptocurrency is trading at $42,845; these losses are being replicated across other cryptocurrencies, as the market as a whole struggle with hundreds of millions of dollars in liquidations.
According to Michael Novogratz, this decline is expected to reverse if the Federal Reserve modifies its aggressive agenda to raise interest rates.
Speaking on the opening day of the “Bitcoin 2022” conference in Miami, the crypto millionaire ascribed the continued decline in Bitcoin’s price to the Central Bank’s hawkish characteristics, which were generating investor unease. According to him, if the Federal Reserve stops its aggressive inflation-fighting approach, “Bitcoin soars to the moon,” he told the event’s almost 25,000 guests.
The March FOMC minutes indicated that the FED intends to hike US interest rates by a half-percentage point, implying future meetings if inflation jumps. Additionally, although many top Fed officials were prepared to increase the bank’s benchmark rate by 50 basis points in March, this did not occur, laying the stage for future meetings.
Novogratz also restated his prior prediction that Bitcoin will soon reach $500,000 and then $1 million, noting that adoption was rapidly nearing the “breakout phase.”
Additionally, the Galaxy Digital CEO observed that the dollar has lost its ‘risk-free’ currency status, particularly in light of the standoff between the US and nations such as China and Russia, bolstering Bitcoin’s credibility.
“Bitcoin’s inception was a breach of trust,” Novogratz said. “Take a look at China’s foreign minister, who just said that his country is unsure if it can trust the US currency.” As of this writing, the Russian Ruble has recovered and is already higher than the dollar, despite the currency falling to new record lows against the US dollar in the aftermath of sanctions, a strong indication of the dollar’s trailing effect on the global economy today.
Having said that, despite bitcoin’s inability to break beyond $48,000 and reverting to a squeeze, there is a chance that it might defy the odds and skyrocket later this year if all macroeconomic conditions align in its favor.
Novogratz also voiced confidence in Bitcoin’s price decoupling from conventional stock indices such as the Nasdaq 100, adding that Bitcoin’s role would be similar to that of gold as a store of value, rather than a currency for daily purchases. “I’m going to preserve and store part of my fortune there,” he said.