Galaxy Digital Holdings founder and former Wall Street trader Mike Novogratz admits that bitcoin is not yet suitable as an asset for hedging risks.
As the reason for this failure, Novogratz called the widespread panic in the markets due to the threat of a new financial crisis of the magnitude of 2008.
Meanwhile, something fascinating is happening in the global financial markets. Assets considered to be salvation in a period of turbulence fall with a roar and bang in the lightning-fast spread of coronavirus around the world.
Moreover, if previously, Novogratz linked the slow growth with a lack of support among baby boomers, now it seems that the Chinese virus will be the main culprit of all troubles.
However, Novogratz does not lose hope. A former Wall Street trader agrees that in the face of liquidity support and an all-consuming panic, Bitcoin has not ceased to be a defensive asset.
The system simply needs time to adapt to the blows.
The past week will be clearly remembered in the cryptocurrency community for a long time. The panic in the financial markets affected the cryptocurrency industry, although this, according to many crypto experts, is impossible.
Towards the end of February, anticipating a panic, the whales began to withdraw funds from cryptocurrency exchanges. So, for example, from a Bittrex cryptocurrency exchange to an unknown wallet, 47,452 BTC were withdrawn in just one transaction. In dollar terms, this amount at that time was $414 million.
And so far, due to global hysteria, Bitcoin is not salvageable despite the good news.
The Australian District Court, for example, recently authorized the use of bitcoin as a means of payment for litigation costs. Thus, an Australian court found that bitcoin is still a traditional form of investment.
Right now, the BTC/USD is trading at $8743. At the weekend, cryptocurrency already managed to experience fall below $8500, and it looks like it will try to do this again.
Now it all depends on how large-scale the panic in the markets will be and how much it will affect Bitcoin.
Novogratz’s hopes that by the end of the year Bitcoin will overcome old highs or at least reach the previous ones, but it seems very unlikely considering the situation in the world.