Bitcoin is set to rally again once the the Fed pauses its monetary-policy tightening. This view was voiced by Galaxy Digital founder Mike Novogratz at the Bitcoin 2022 conference in Miami, according to Bloomberg.
In his forecast, the central bank will stay “very aggressive” for some time due to high inflation. In the near term, the Fed is expected to raise rates by another 50 basis points, he says.
But as the economy slows, the Fed will retreat and “Bitcoin will take off to the moon,” Novogratz believes. He repeated forecasts that digital gold will reach $500,000, and ultimately $1 million.
However, the coin could reach these targets with “stability in the West,” the billionaire noted.
“Before going to bed I pray that the managers of the American economy do not mess up. I really pray that the dollar stays strong and that Bitcoin does not rush toward infinity. Because the opposite would mean the collapse of the Western world,” said Novogratz.
According to him, in the future the cryptocurrency will be used not for payments but as a store of value. The coin is increasingly becoming part of institutional portfolios, he added.
Novogratz’s forecasts about the Fed’s policy were borne out in the published протоколе of the Federal Open Market Committee’s March meeting. The central bank, for the first time since December 2018, raised the rate by 25 basis points.
The document shows that many Fed officials favored a 50 basis-point hike immediately, which could be reflected in decisions at the next meeting on May 4–5.
Earlier in March, Novogratz described Bitcoin as an alternative to fiat for residents of countries where authorities pursue ineffective monetary policy.