Mike Novogratz claims that many people bought Bitcoin after the last round of federal stimulus checks and thinks they’re likely to again.
Amid a long battle over whether or not United States citizens will get their $2,000 stimulus checks to help them to weather the economic repercussions of the COVID-19 pandemic, Mike Novogratz has weighed in on what the news could mean for the stock and crypto markets.
The CEO of Galaxy Digital spoke to CNBC’s Squawk Box amid the surreal image of a Wall Street apparently unfazed by the commotion in the Capitol yesterday. As a Fox News caption had it in real-time yesterday, “Markets rally as protestors disrupt electoral college vote.”
A further round of stimulus checks at $2,000 each, recently approved by the House of Representatives, could, from Novogratz’s perspective, be further good news for the markets. With the Senate now flipped after the runoff election in Georgia, he noted that:
“A lot of that [stimulus] will find it’s way into the markets. Certainly, when it comes into young people’s hands, they’re going right to their Robinhood accounts. One of the most unique things last time was seeing how many people bought Bitcoin with the exact amount of stimulus. Boom, boom.”
“The market’s sensing all that,” Novogratz added. While many working Americans continue to struggle through the economic turbulence and job precarity exacerbated during the 2020 crisis, he pointed to the bullish sentiment among traders of all stripes:
“There’s speculative excess all over the place, when you look at the amount of options buying in stocks like Tesla, it’s to the point of insanity.”
This disconnect is likely to, however, spell trouble at some point — even for those cashing in on the crisis. “You’ve got to watch for the cracks. One day we’ll wake up, and markets will be reversing, and then they’ll reverse hard. I just don’t know when that is,” he said.
Earlier this week, Novogratz attributed Bitcoin’s unprecedented price highs to institutions moving in, pointing to PayPal’s servicing of Bitcoin as well as action from big U.S. insurers. As of press time, the coin is trading at close to $38,000, up almost 8.6% on the day.