Crypto bull Mike Novogratz sees bitcoin's price floor at $38,000 as institutions take positions during latest sell-off

Crypto bull Mike Novogratz sees bitcoin's price floor at $38,000 as institutions take positions during latest sell-off
  • Mike Novogratz told CNBC he sees bitcoin hitting a floor of $38,000.
  • Bitcoin and other cryptocurrencies sank after the Fed indicated potentially faster tightening of monetary policy.
  • Bitcoin traded in the $42,000 range on Thursday.
  • Mike Novogratz said Thursday he expects to hit a bottom at $38,000 as institutional investors prepare to buy the cryptocurrency in the midst of a sell-off as 2022 gets underway.

    "I know big institutions who are going through their process to put positions on and so I think they're gonna see those as attractive levels to buy," Novogratz said on CNBC's "Squawk Box" program. "On the charts, $38 [thousand], $40 [thousand] feels like where we should bottom."

    Bitcoin has dropped roughly 11% since January 1, losing ground from about $47,700 when 2022 started to Thursday's intraday low of around $42,560.

    Bitcoin and other cryptocurrencies took big hits during Wednesday's session. So-called risk assets tumbled after minutes from the Federal Reserve's December meeting indicated policy makers are preparing to tighten monetary policy potentially faster than previously expected. Bitcoin had plunged to a one-month low, and r, the second-biggest cryptocurrency, sank more than 10% to trade under $3,400. Ether remained slightly lower Thursday.

    "All of us, every single investor out there, has to have some part of their head that says, "Are we going into a paradigm shift, right?," said Novogratz, the billionaire head of investment management company Galaxy Digital Holdings.

    "We've had this philosophy that the Fed's gonna keep rates low forever and even now, they're going to raise rates to 2% over two years gradually and continue to buy Treasuries for a while. So we're in this liquidity bubble."

    He noted that US consumer inflation drove up to 6.8% in 2021. "If inflation doesn't come down like the Fed thinks [it will], all bets are off," he said, also noting the 10-year Treasury has shot up beyond 1.7% from 1.3% in a week.

    "It looks like it's going to go to two [percent], two and a half. And so if it goes to two, two and a half, asset prices are probably not going to go high during that time," he said.

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