Mike Novogratz Revokes Bitcoin-$500K Call, Blames Fed Rate Hikes

• Mike Novogratz believes it will take longer than he previously expected for bitcoin to reach $500,000.
• Federal Reserve interest rate hikes have suppressed the token’s value this year, the Galaxy Digital CEO said.
• Novogratz had previously predicted that bitcoin would reach $500,000 within five years.

Bitcoin now faces a tougher road to eventually reach $500,000, according to Mike Novogratz – with the Galaxy Digital boss backing away from his earlier prediction that the token would reach that level within five years.

Novogratz said in a recent interview that the Federal Reserve’s monetary tightening campaign led by Chairman Jerome Powell has been the key factor in bitcoin’s price plunging 63% to just under $17,000 this year.

“No, not in five years,” he told Bloomberg TV when asked about an earlier prediction he had made that bitcoin would reach $500,000 by 2027.

“The biggest change that happened and the real reason bitcoin went down from $69,000 to close to $20,000 is that Jay Powell decided to find his central bank superpowers and start beating inflation over the head with a series of rate hikes,” Novogratz added.

The Fed has raised interest rates by an outsized 75 basis points at each of the last four meetings in an effort to crush inflation, which hit four-decade highs before falling modestly to 7.7% in October.

That has weighed on economic growth and tech stocks as well as digital assets — which are now mired in a brutal slump that some have dubbed a crypto winter.

The industry has also faced a number of high-profile bankruptcies, including asset manager Three Arrows Capital, lending firms BlockFi and Celsius and Sam Bankman-Fried’s exchange FTX, which collapsed last month after suffering a solvency crisis.

These implosions won’t weigh on bitcoin’s long-term price, according to Novogratz.

“The Fed is in control and they’re doing a damn good job, and that’s the main reason crypto went down,” he said. “The rest of this malarkey that we’ve had between Three Arrows and BlockFi and Celsius and all these companies that were either poorly run or fraudulent is absolutely damaging the overall confidence in crypto.”

“But this too shall pass – they will be brushed off in the dustbin of history and the industry itself will emerge having learned lessons and you will see the price recover,” Novogratz added.

Read more: Sam Bankman-Fried Urges Crypto Investors To Put Their Money In Non-Business Exchanges Like FTX