Novogratz predicts BTC price growth if the Fed follows a softer policy towards the financial market

2 min readOct 6, 2022

The main crypto coin will rise in price if the Fed does not aggressively raise rates as part of the fight against inflation. This opinion was expressed by the head of Galaxy Digital Mike Novogratz.

“When [Fed chairman] Powell started hitting inflation with a sledgehammer over the head, of course, bitcoin pulled back, like many assets. If he gives up this fight […] the quotes of the first cryptocurrency will immediately turn around,” the entrepreneur said.

According to Novogratz, the Fed’s move to increase rates has stripped the first cryptocurrency of its status as a “powerful hedge against rising consumer prices.” The measures taken by the Fed affected the market through correlation with conservative financial assets much more seriously than inflation itself.

And the head of SkyBridge Capital, Anthony Scaramucci, expressed doubt that BTC can, in principle, be considered an inflation protection tool. In his opinion, to get such a status, bitcoin needs to attract a billion users.

The report on jobs in the US, which is due to be published as early as this Friday, can affect the cryptocurrency market. Some experts believe that the Fed may choose a softer position in the framework of monetary policy.

Traders on the Chicago Mercantile Exchange, for example, believe that the federal funds rate will reach 4.5% in 2023, while only a week ago there were opinions that the rate would be at around 4.7%. However, now more players are betting on a more “loyal approach” from the regulator, which previously raised rates to the highest level in the last 15 years.

Earlier, the head of the Federal Reserve Bank of San Francisco, Mary Daly, noted that the authorities have “a lot of room to raise rates,” but she is not worried about the state of the markets at the moment.

The main question that experts ask is how a sharp increase in lending rates and traditional markets can affect. In addition, analysts are trying to assess the likely risks of such actions by the Fed for the stability of the entire financial system.