• Bitcoin’s price dropped 8% in May, its worst month since November.
• Galaxy Digital CEO Michael Novogratz is still bullish on BTC, attributing the recent weakness to a lack of participation from institutional investors.
• Novogratz expects Bitcoin to benefit once the U.S. Federal Reserve starts to cut interest rates that he sees likely in the 4th quarter of 2023.
WeChat Enabled Crypto Trading
Michael Novogratz talked about two recent developments on CNBC’s „Squawk Box“ that he dubbed meaningfully positive for Bitcoin – WeChat enabled crypto trading and Hong Kong allowing crypto trading for retail customers through regulated exchanges. This could lead to increased adoption in Asia which would be beneficial for the price of Bitcoin.
Lower Interest Rates Positive for Bitcoin
Novogratz also believes that lower interest rates will be a positive factor for Bitcoin, as it will make it more attractive than a 5% return on Treasury Bills if one had to invest $10,000 right now. The Galaxy Digital CEO expects the Federal Reserve to start cutting interest rates by October if there is an economic slowdown in the second half of 2023.
Bitcoin Halving Next Year
The total supply of Bitcoin is set to cut in half next year which has historically been a tailwind for price appreciation, according to Novogratz. This could lead to further gains in the price of BTC over time as demand increases due to increased scarcity.
In conclusion, despite experiencing a sell-off this month, Michael Novogratz remains bullish on Bitcoin due to two recent developments – WeChat enabled crypto trading and Hong Kong allowing retail customers access through regulated exchanges – as well as potential lower interest rates starting from October and next year’s halving event which should increase demand and cause prices to appreciate further over time.