Crypto bull Mike Novogratz sees bitcoin's price floor at $38,000 as institutions take positions during latest sell-off

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Crypto bull Mike Novogratz sees bitcoin's price floor at $38,000 as institutions take positions during latest sell-off
Mike Novogratz.Michael E. Novogratz
  • Mike Novogratz told CNBC he sees bitcoin hitting a floor of $38,000.
  • Bitcoin and other cryptocurrencies sank after the Fed indicated potentially faster tightening of monetary policy.
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Mike Novogratz said Thursday he expects bitcoin to hit a bottom at $38,000 as institutional investors prepare to buy the cryptocurrency in the midst of a sell-off as 2022 gets underway.

"I know big institutions who are going through their process to put positions on and so I think they're gonna see those as attractive levels to buy," Novogratz said on CNBC's "Squawk Box" program. "On the charts, $38 [thousand], $40 [thousand] feels like where we should bottom."

Bitcoin has dropped roughly 11% since January 1, losing ground from about $47,700 when 2022 started to Thursday's intraday low of around $42,560.

Bitcoin and other cryptocurrencies took big hits during Wednesday's session. So-called risk assets tumbled after minutes from the Federal Reserve's December meeting indicated policy makers are preparing to tighten monetary policy potentially faster than previously expected. Bitcoin had plunged to a one-month low, and ether, the second-biggest cryptocurrency, sank more than 10% to trade under $3,400. Ether remained slightly lower Thursday.

"All of us, every single investor out there, has to have some part of their head that says, "Are we going into a paradigm shift, right?," said Novogratz, the billionaire head of investment management company Galaxy Digital Holdings.

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"We've had this philosophy that the Fed's gonna keep rates low forever and even now, they're going to raise rates to 2% over two years gradually and continue to buy Treasuries for a while. So we're in this liquidity bubble."

He noted that US consumer inflation drove up to 6.8% in 2021. "If inflation doesn't come down like the Fed thinks [it will], all bets are off," he said, also noting the 10-year Treasury has shot up beyond 1.7% from 1.3% in a week.

"It looks like it's going to go to two [percent], two and a half. And so if it goes to two, two and a half, asset prices are probably not going to go high during that time," he said.

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