Novogratz predicts that the U.S. economy is heading towards a recession, and he believes that the Federal Reserve will be forced to cut interest rates much sooner than anticipated.
In an interview with CNBC, Novogratz noted that the current market conditions are reminiscent of December 2018, when the Federal Reserve’s decision to raise interest rates sent the market into a downward spiral.
Novogratz added that the commodity market, particularly the oil market, is also indicating a looming recession.
Novogratz believes that the Federal Reserve Chairman, Jerome Powell, should pause and cut interest rates soon to address the issue. He pointed out that this is a significant shift in psychology that is influencing Bitcoin and Ethereum markets.
Novogratz also suggested that this economic situation is precisely the reason why Bitcoin and cryptocurrencies were created. Governments tend to print excessive amounts of money during economic hardships, and Bitcoin can provide a hedge against inflation.
In response to a question about the possibility of a banking system contagion, Novogratz affirmed that it is a real concern. He stated that Congress and the Federal Reserve would have to take more significant steps to address the issue. Novogratz concluded by saying that there would be constant pressure on regional banks and the entire system unless more dramatic measures are taken.
