CEO of Galaxy Digital and prominent crypto bull Michael Novogratz said that a massive stimulus package in the US could help in creating a compelling case for Bitcoin, right before its halving.
How will Bitcoin shine?
Speaking to CNBC on Tuesday, Novogratz said that stimulus packages are helping in creating a positive narrative for Bitcoin. He said,
“Bitcoin has this moment right now. Just today we had another trillion-dollar stimulus—money growing on trees, and my mother taught me when I was younger, ‘money doesn’t grow on trees’.”
He said that more people are getting interested in cryptocurrencies because of the fiscal stimulus as they are looking for something with scarcity. Policymakers’ moves, as well as the reducing block rewards because of May’s halving, will help in increasing the appeal of Bitcoin. He adds that these two events will add micro tailwinds to the adoption of Bitcoin. Gold has already received some of these benefits and is going to hit new highs this year. Novogratz emphasized that policymakers will play along with this powerful story in the times to come.
Other experts have similar views
Novogratz’s views are supported by many industry peers who believe that this is the right time for Bitcoin to shine. Former Facebook exec Chamath Palihapitiya said that the government’s reaction to the pandemic will have a greater impact on Bitcoin than the COVID-19 virus itself. The billionaire investor believes that Bitcoin’s chances of playing a valuable role in the country’s economy are growing.
He suggests that the ongoing economic crisis has improved the chances of Bitcoin taking up a more valuable economic role by 5% or 10%. In that case, one Bitcoin could be sold for millions of dollars.
However, the Bitcoin price movement fails to show the same enthusiasm. The coin is down 30% from the February high and the pandemic has done nothing to increase its value. Dan McArdle, the co-founder of Messari said that this movement is because of the misunderstanding about the key value proposition of the cryptocurrency. He thinks that Bitcoin is not a hedge against a recession, but a hedge against the loss of confidence in fiat currencies and inflation. He added that this would become even more important as central banks around the world add several trillion to their balance sheet.
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