It’s been a rough start to the week for crypto investors. The total market cap slumped below $1 trillion for the first time in 18 months. Bitcoin spearheaded the crash, falling to $21,000 on Monday, and Ether (ETH) dropped to as low as $1,093.
The selloff deepened after news surfaced that the US Federal Reserve could likely raise interest rates this week, raising the risk of a recession in the country.
Novogratz: Bitcoin Will Bottom at $20k
While the U.S. stock market also tumbled to the news, the crypto market suffered the most, leaving many investors in panic as they feared both Bitcoin and ETH would crash below $20,000 and $1,000, respectively, if the bloodbath continues.
But Mike Novogratz, founder and CEO of crypto investment firm Galaxy Digital, thinks major cryptocurrencies would remain strong at these levels.
During a Morgan Stanley Financials Conference on Monday, the billionaire investor noted that the crypto market is closer to the “bottom” than the stock market. He believes the equity market risks plummeting further while Bitcoin and Ether would bottom at $20,000 and $1,000, respectively.
“Ethereum should be around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it’s $23,000, so you’re much closer to the bottom in crypto than you are only where i think stocks are going to have another 15% to 20% [decline]“said Novogratz.
He further noted that now is not the right time to “deploy lots of capital” considering the spiking Fed rates. The billionaire said this would only change when the Fed realizes that the “economy is so bad” and stops hiking interest rates.
Crypto will reshape the world
Meanwhile, Mike Novogratz has always been bullish on Bitcoin and crypto-assets. The BTC proponent said earlier this year that blockchain will reshape the world while crypto will transform the financial industry like never before.
But while he remains bullish on the crypto industry, Novogratz believes many crypto hedge funds will not survive the bear market. According to him, about two-thirds of the 1,900 existing hedge funds in the industry will go out of business as the crypto winter intensifies.
