Novogratz: Crypto Cycle Top Not Yet Reached, Dovish Fed Could Drive Year-End Rally

Mike Novogratz, founder and CEO of Galaxy Digital, shared insights on the crypto market via social media platform X, stating that the current cycle has not peaked despite sluggish conditions. He attributed the weakness to long-term investors rebalancing their portfolios after a prolonged bull run, which involves diversifying away from over-concentrated positions. This rebalancing, while creating short-term price pressure, is seen as healthy for the market's long-term sustainability by broadening the investor base.

Novogratz highlighted that Galaxy Digital boasts the highest employee stock ownership ratio in both the cryptocurrency and data center sectors. On the macroeconomic front, he expects a new Federal Reserve chair to be appointed by year-end. If this chair adopts a more dovish policy than anticipated, it could inject new momentum into the crypto market, potentially lowering interest rates and fueling a bullish rally. He emphasized that such a shift, coupled with declining inflation and slower economic growth, might prompt the Fed to focus on stimulus, benefiting risk assets like cryptocurrencies.