Novogratz: Long gold, euro and bitcoin as ‘clearest trades’

Novogratz is bullish on Bitcoin and Ethereum, and gold and the Euro.

As the broader market looks for a clear path amid recent macroeconomic events, including the mayhem witnessed after major bank collapses, Galaxy Digital CEO Mike Novogratz offered his outlook for what could be the best trades in the year.

Why bitcoin, gold and euro are “clearest trades”

According to the billionaire investor, bitcoin and ethereum, as well as gold and the euro are going to outperform most other investments. The Galaxy Digital founder said this during an interview with Bloomberg TV on Wednesday, highlighting the path the US Federal Reserve is poised to take with regard to interest rates.

Novogratz said the Fed’s likely easing of rate hikes in the aftermath of recent turmoil in the banking industry could trigger a credit crunch. The assets he sees performing well as the Fed stops interest rates hikes and then cuts them.

A credit crunch will slow the US economy, he added, noting that the Fed will be forced into aggressive rate cuts. The investor forecasts this path will materialize by the end of 2023.

On what investment assets will thrive in such a scenario, he says the precious metal, the top two cryptocurrencies and the EUR. He said:

“The clearest trades have been and will continue to be long gold, long the euro, long Bitcoin, long Ethereum. These [are] assets that should do well with the Fed stopping hiking and then cutting.”

As Invezz recently reported, speculators have increased their long gold bets. Interest in the precious metal has also skyrocketed amid the move by multiple US states to reclaim gold and silver as legal tender. Gold price is currently around $2,044 per ounce.

Novogratz sees bitcoin hitting $40,000

Commenting on the price of bitcoin, the Galaxy Digital boss said he expects the benchmark cryptocurrency to hit a “sweet spot.” In his opinion, the outlook plays out if the US central bank’s interest rates begin to drop.

Novogratz noted that BTC has had a massive run in 2023, with the latest spike above $30,000 seeing bulls hit 10-month highs going back to last June. He suggests bitcoin price could consolidate above the $30k mark before buyers target $40,000 – if the point of view on what the Fed will do next is right.

BTC price traded at $30,236 at 8:37 am ET on Thursday, while Ethereum price held up nicely after the Shanghai upgrade – surpassing the $2,000 mark for the first time since last August.

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