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Galaxy Digital CEO Michael Novogratz said on Tuesday that the current rally in cryptocurrencies isn’t built on an influx of new money, but rather is fueled by longtime crypto enthusiasts re-entering the market after their course autumn last year.
“This crypto rally was built on the back of the crypto community,” Novogratz told CNBC. “It wasn’t new money … it wasn’t pension funds and money managers coming in. It really was retail.”
Novogratz, who attributes much of Bitcoin (BTC-USD)’s decline from its 2021 highs above $60,000 to the Federal Reserve’s aggressive rate hike, added that “some new people” are entering the crypto space, leading to led Galaxy Digital’s business to an “uptrend”.
However, Novogratz does not see this as a sign that the “institutional pie” has grown. Rather, the famous crypto investor believes that turbulences in the crypto space, such as the bankruptcy of major exchange FTX, have funneled many established crypto traders to the remaining institutions. “I think our business boom comes because a lot of our competitors have been wiped out,” he said.
Galaxy Digital’s CEO explained that the market is experiencing a “constructive rally” due to a number of factors, including belief that the Fed has ended or is about to end raising rates. Meanwhile, aggressive moves in Hong Kong, Abu Dhabi and Dubai to establish regulatory frameworks have boosted confidence in crypto, leading to additional money flowing out of the region.
When asked about Ethereum (ETH-USD), Galaxy Digital’s CEO claimed that it has a “vibrant community” that makes it more secure than other altcoins. “I don’t see a big selloff coming on Ethereum,” he concluded.
Looking ahead to Tuesday’s intraday action in the crypto space, Bitcoin (BTC-USD) surged 3% to $30.12K, while Ethereum (ETH-USD) surged to around $1,900.
Meanwhile, crypto-focused ETFs benefited from the upsurge in bitcoin prices. Here are Tuesday’s intraday performances for some of the most popular crypto ETFs:
- ProShares Bitcoin Strategy ETF (BITO) +3%
- Valkyrie Bitcoin Strategy ETF (BTF) +3.3%
- VanEck Bitcoin Strategy ETF (XBTF) +3.3%
- Invesco Alerian Galaxy Crypto Economy ETF (SATO) +5.7%
- Global X Blockchain and Bitcoin Strategy ETF (BITS) +4.6%
- Global X Blockchain ETF (BKCH) +6.9%
- VanEck Vectors Digital Transformation ETF (DAPP) +8.9%
- Bitwise Crypto Industry Innovators ETF (BITQ) +7.7%.
Looking at individual stocks, Marathon Digital (MARA) +12%Riot Blockchain (RIOT) +15%Coin base (COIN) +7%Bit farms (BITF) +9%MicroStrategy (MSTR) +7%.
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