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 sell-off worsened after news surfaced that the U.S. Federal Reserve could likely hike interest rates this week, increasing 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, believes the leading cryptocurrencies would hold strong at those 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 hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20% [decline],” Novogratz said.
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 sector 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.