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Will Powell Really Slow Down The Crypto Market?

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EDITOR'S NOTE: President Biden’s decision to stick with the status quo and keep Fed chairman Jerome Powell in the position for four more years could be bad news for crypto market. Yahoo! Finance reports that former Goldman Sachs executive and CEO of Galaxy Digital Mike Novogratz believes Powell’s second term will let him “act more like a central banker than a guy that wants to be reappointed.” This means that Powell could start “raising rates much faster than we thought, [which] would slow all assets down including the Nasdaq and crypto market.” Despite this fact, many wealth advisors are still pouring money into crypto, believing Powell will continue making decisions that are in the best interest of Wall Street. One voice speaking out against this is Goldman Sachs which, in May, noted that “the fear of missing out (FOMO) was driving institutional investors to Bitcoin.”

Mike Novogratz, former Goldman Sachs executive and CEO of Galaxy Digital, has cautioned that Federal Reserve Chairman Jerome Powell could slow down the crypto market in his second term in office.

Novogratz said the “macro story has changed a little bit” and added that Powell getting reappointed could allow him “to act more like a central banker than a guy that wants to be reappointed”.

“If we have to start raising rates much faster than we thought, that would slow all assets down including the Nasdaq and crypto market,” he said.

Mike Bailey, director of research at FBB Capital Partners, also commented on the effect Powell’s second term in office could have on the crypto industry.

Recently, he said that for “die-hard crypto bulls” another Powell term may provide some confirmation bias, since these investors often view crypto as a hedge for loose Fed policy.

On the other hand, Douglas Boneparth – president of the financial advisory firm Bone Fide Wealth – commented there was uncertainty about how markets will react without additional support from the Fed.

Novogratz entices funds to put money into crypto

Meanwhile, Novogratz remains bullish about the overall crypto future by saying the amount of institutions Galaxy sees moving into the space was staggering.

“I was on the phone with one of the biggest sovereign wealth funds in the world today, and they’ve made the decision on a go-forward basis to start putting money into crypto,” he claimed.

“I’ve had the same conversations with big pension funds in the United States.”

Microstrategy CEO Michael Saylor recently said that Bitcoin will grow 100X to become a $100 trillion asset class.

In May, investment bank Goldman Sachs said the fear of missing out (FOMO) was driving institutional investors to Bitcoin.

US President Joe Biden recently declared Jerome Powell would serve his second four-year term as Federal Reserve chair while Governor Lael Brainard, who was among the candidates for the prestigious spot, is promoted to vice-chair.

Originally posted on Yahoo Finance.

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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