(Kitco News) – Bitcoin’s (BTC) early price action on Thursday has been rather subdued compared to other days this week as the top crypto peaked around $71,320 overnight and has since pulled back to support near $70,000.
BTC/USD Chart by TradingView
Markets are still digesting yesterday’s hotter-than-expected Consumer Price Index (CPI) report, which showed that inflation remains a tricky beast to rein in. As a result of three consecutive CPI reports coming in above expectations, the market now anticipates only two rate cuts in 2024.
Some analysts have even started to speculate that the Fed could be forced to hike rates if the cost of living continues to rise, which is a far cry from the beginning of the year when they forecasted up to six rate cuts in 2024.
With many asset prices trading at or near record highs, the fact that so many investors are calling for rate cuts to extend the market frenzy has some experts saying that a healthy pullback is needed to clear out the froth and bring valuations back down to earth.
Mike Novogratz, CEO of Galaxy Digital, said he sees no reason for the Fed to cut rates in the current environment. He said that while it would be good for assets like gold, silver, and Bitcoin, it would be a negative for the U.S. economy.
Call me crazy but I don’t see one good reason for the fed to cut rates. Yet think they will. It’s a great set up for $BTC, gold, silver, copper. It’s not a great set up for the USA though. We need a politician who will cut spending dramatically!
Sound of silence…— Mike Novogratz (@novogratz) April 8, 2024
During a Sunday conversation with Scott Melker, host of The Wolf of All Streets podcast, Novogratz suggested that Bitcoin could easily surpass his base case of $100,000 in 2024 amid the rampant money printing and escalating debt in the U.S., which threatens to debase the U.S. dollar.
“What worries me, quite frankly, is that we do get into the runaway train in crypto,” he said. “There is a scenario where you can see crypto become a runaway train. It’s just self-fulfilling and it eats itself. You’re not at $100,000, but you’re at $300,000 or $400,000. It’s not my base case, but I can make that scenario up.”
“That’s not good for society,” he added. “Society doesn’t like all these new people: ‘How did that guy get so rich and I’m not?’ It’s what creates revolutions. It creates wars. It creates a breakdown in civil society. We can have wealth transfers at a moderate pace, but when they happen at rapid paces it really is often not good.”
“I think Bitcoin can go up just because of adoption,” Novogratz said. “But to see it explode usually will be because we’re losing control of our debt.”
At the end of March, Novogratz relayed similar concerns during an interview with Bloomberg while explaining what is drawing people to Bitcoin and crypto in 2024.
“Each 100 days our government’s adding a trillion dollars of debt. We’re at $34 trillion. We will be at $35 trillion and then $40 trillion,” he said. “That story is so powerful. It makes it easy for salespeople, for registered investment advisors, to tell their clients to put a couple percent of [their] net worth in Bitcoin. And you’re seeing that happen. This is a process that’s going to go for years, not for months.”
“When you print as many dollars as we’re printing… the purchasing power of the underlying currency goes down,” he added. “The long-term history of governments is that they debase their currencies, and we’re in that process.”
At the time, he predicted that Bitcoin’s price would “consolidate for a while between $75,000 and maybe $62,000 or even $58,000” – which is more or less what has transpired – but said that ultimately, it would trend higher.
On Thursday, Novogratz pointed to the latest market commentary from Galaxy Digital to show why he thinks the Bitcoin bull market is just getting started.
“Bitcoin’s increased popularity can no clearer be demonstrated than Bitcoin Google searches reaching their highest levels in over a year [in March] and surpassing the Google search popularity of international superstars Taylor Swift and Beyonce,” the report said.
At the time of writing, Bitcoin trades at $69,860, an increase of 1.9% on the 24-hour chart.
