FX.co ★ Bitcoin will go to the moon once Fed pauses, says Mike Novogratz

According to Galaxy Digital founder Mike Novogratz, despite the aggressive monetary policy of the Federal Reserve, as soon as the U.S. economy begins to recover, the Fed will have to pause and at that moment Bitcoin will go to the moon.

The comments were made during the Bitcoin 2022 conference in Miami.

The market is expecting multiple interest rate hikes by the Federal Reserve throughout the year as Jerome Powell has taken a very hawkish tone in fighting high inflation over the past four decades. According to CME FedWatch Tool, there is a 76.6% probability of a half-point rate hike at the May meeting.

Many, including Goldman Sachs, are also predicting another 50 basis point gain at the June meeting.

Economists at Goldman Sachs said back in March that they expected interest rate increases of 50 basis points at the May and June meetings, and then at the remaining four meetings in the second half of 2022 by 25 basis points. And three quarterly increases in the first and third quarters of 2023.

This is a pretty aggressive stance. And Powell once noted that the U.S. economy can withstand a tighter monetary policy. Still, economists speculate and fear how badly the U.S. economy will be hit when the Fed raises rates.

Deutsche Bank warned this week that the U.S. will take a major hit in 2023 and 2024 as the Federal Reserve slows growth prospects with its aggressive tightening plan. And the rise in the U.S. unemployment rate by more than 1.5%.

According to Novogratz, as soon as the Fed is forced to pause due to a slowdown in economic growth, Bitcoin will go to the moon. And there is also the possibility of an industrial recession.

Moreover, Novogratz believes that a possible long-term price target for Bitcoin is $500,000 and $1 million. And this means that the Western world can really fall apart.

During the first quarter of the year, Bitcoin mirrored U.S. stocks as investors reacted to shifting risk sentiment and risk aversion due to increased geopolitical uncertainty.

However, Novogratz added that Bitcoin may be sending some decoupling signals. Explaining that the purpose of Bitcoin is to store wealth.

As 25,000 attendees flocked to Miami for the annual Bitcoin event, the world's largest cryptocurrency is down nearly 4% on the day.