Galaxy Digital CEO Sees No Major Bitcoin Correction Ahead

During a Squawk Box episode on CNBC, Mike Novogratz, the founder and chief executive of Galaxy Digital hedge fund, talked about the cryptocurrency market, concentrating on Bitcoin. In his commentary, Novogratz touched on the present state of Bitcoin after it hit a new all-time high of $73,000, highlighting the possibility of a market correction. Though the prices have reached levels much higher than one could have anticipated, he does not expect a fall below some of the most critical support points.

There are historical patterns that, according to Novogratz, will cause Bitcoin to have a correction. Yet, he is very positive, concluding that even such a fall would not push Bitcoin’s price level under $55,000 or $50,000. He linked the current market dynamics with high funding rates and an air of frothiness, which was a sign of traders’ increased activity and speculation.

Spot Exchange-Traded Funds Fueling Bitcoin’s Rally

Spot Exchange-Traded Funds (ETFs) are a significant driver of the recent surge of Bitcoin, as stated by Novogratz. These instruments have been intensively buying Bitcoin, which has greatly limited the available supply and, hence, the price hikes. Novogratz pointed out that given the fact that these ETFs are continuing to accumulate at high rates, Bitcoin is likely to keep moving upwards.

On March 12, spot Bitcoin ETF achieved a historical inflow of $1.05 billion, which is 56% higher than the previous record gained on February 28. The pack is led by BlackRock, which has the biggest Bitcoin inflows of all the ETFs. This huge institutional demand reflects the increasing recognition and adoption of Bitcoin in the world of mainstream financial portfolios.

Novogratz Positive on Ethereum ETF Prospects

It also went into the regulatory environment of cryptocurrencies, predominantly Ethereum, and the expectation of a spot Ethereum ETF. Novogratz identified the debate as a transition of Ethereum from a proof-of-work to a proof-of-stake consensus mechanism. He also claimed that following the classification of Ethereum by the Securities and Exchange Commission (SEC), similar to the case of Bitcoin ETFs, a spot Ethereum ETF could be born depending on the position of the regulator on Ethereum.

In a related note, Elon Musk, owner of the X social media app, contributed to the discourse on cryptocurrency scams by sharing a tweet that indirectly compares certain cryptocurrencies to the US dollar. The tweet criticized a hypothetical cryptocurrency with a vast supply and uneven distribution, drawing parallels with the US dollar’s inflationary trends.

pic.twitter.com/Og6pgbbFZE

— Elon Musk (@elonmusk) March 13, 2024

Musk’s engagement with this tweet indicates a subtle endorsement of the skepticism towards traditional fiat currencies. It highlights the broader conversation about the value and stability of digital versus fiat currencies.

Read Also: Grayscale Transfers $38M in BTC to Coinbase Prime, New Custody Address Speculated