Billionaire Mike Novogratz predicts credit crunch amid banking crisis, says Bitcoin and Crypto fit the moment
Galaxy Digital CEO Mike Novogratz warns that the problems currently plaguing banks are broad and deep-seated.
Novogratz says in a new CNBC interview that there is going to be a credit crunch globally based on what some leading indicators suggest.
“The commodity market is telling you, the oil market is telling you … we’re going into a recession. We’re going to have a credit crunch in the U.S. and globally.”
According to the Galaxy Digital boss, the credit crunch will be caused by banks reducing lending activity as they rebuild their capital bases following a fall in deposits triggered by depositors’ fears about the safety of their assets.
“Now you have a market that is going to go into a credit crunch. How do banks rebuild capital? They lend less. And so you’re going to see a credit crunch happen in the United States, and that starts to be priced into the market in a dramatic way.”
While he predicts that interest rates are likely to fall in the near term after a series of hikes, Novogratz says that the creation of Bitcoin (BTC) was inspired by loose monetary policy like the one that is about to be put in place.
“Fixed income commodities will tell you we are headed for a recession. [Federal Reserve Chair] Powell should take a break and we will cut interest rates sooner than we think.
And so there is a huge difference in psychology. It has Bitcoin and Ethereum on the go. If there was ever a time to be in Bitcoin and crypto, this is why it was created by governments printing too much money when the pain becomes too great. And we see that.”
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