- Mike Novogratz expects bitcoin to act as a report card that reviews the government’s handling of finances.
- “We’re in uncharted territories in how much money we’re printing and bitcoin is a report card on that.”
- The billionaire said many stimulus checks are going to young people who want to buy bitcoin.
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“Bitcoin will literally be like a report card for how citizens think the government is doing managing their finances,” the Galaxy Digital CEO said on CNBC’s “Squawk Box” after the cryptocurrency hit a record high above $61,000 over the weekend.
Novogratz indicated that bitcoin is an inflationary hedge and a digital store of value, rather than regular money, which is why institutions, money managers, and retail investors are piling into the digital asset. If people in the US believe Fed Chair Jerome Powell and Treasury Secretary Janet Yellen can facilitate full employment for the economy while avoiding inflation, they will stop buying bitcoin, he said.
The billionaire further said there has been a “secular shift” from the mindset that bitcoin isn’t an asset class, to it now becoming one. “We’re in uncharted territories in how much money we’re printing and bitcoin is a report card on that,” he said.
Bitcoin tumbled as much as 10% to $55,267 on Monday, but it is up more than 900% over the last 12 months. One of the core drivers behind the digital asset’s price is the massive amounts of stimulus that central banks continue to pour into the financial system.
President Joe Biden’s latest round of $1,400 direct payments that began landing into people’s bank accounts this weekend showed that retail investors who want to buy bitcoin were thrilled, Novogratz said.
“A lot of the stimulus checks are going to young people who want to buy bitcoin,” he said. “What happens on the weekend is retail gets excited you can tell because the cost of leverage goes way up on the weekend.”