Galaxy Digital CEO Mike Novogratz warns that the problems currently plaguing banks run wide and deep.
Novogratz says in a new CNBC interview that there is going to be a global credit crunch according to what some leading indicators suggest.
“The commodity market tells you, the oil market tells you… we’re headed for a recession. We are going to have a credit crunch in the US and around the world.”
According to the CEO of Galaxy Digital, the credit crunch will be caused by banks’ reduced lending activity as they rebuild their capital bases after a drop in deposits triggered by depositors’ fears about the safety of their assets. .
“Now you have a market that is going to go into a credit crisis. How do banks rebuild capital? They lend less. So, you will see a credit crunch in the United States and that will start to price in the market in a dramatic way.”
While he forecasts that interest rates are likely to fall in the short term after a series of increases, Novogratz says that the creation of Bitcoin (BTC) was inspired by loose monetary policies like the ones about to be implemented.
“Fixed income, commodities will tell you we’re headed for a recession. [Federal Reserve Chair] Powell should pause and we will be cutting rates sooner than we think.
And that’s a big difference in psychology. You have Bitcoin and Ethereum on the go. If ever there was a time to be in Bitcoin and crypto, that’s why it was created because governments print too much money whenever the pain is too great. And we are seeing it.”
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