Galaxy Digital CEO Mike Novogratz made a prediction about the cryptocurrencies and tech-heavy Nasdaq Composite stock market index in a recent tweet. The famous CEO issued a bearish warning, claiming that these investment instruments will remain under pressure as long as rates rise.
Tens, bonds breaking down. As long as rates go higher we will see pressure on Nasdaq and crypto. 2% seems a logical target for tens.
— Mike Novogratz (@novogratz) January 18, 2022
Bitcoin is trading in the red today, recording a daily low of $41,650. The flagship cryptocurrency is trading in line with US stock market indexes. S&P 500 and Dow Jones seem to have lost 1.7% and 1.6% respectively in the last 24 hours.
Treasury sales seem to be the main reason behind the ongoing stock market correction. The yield on 10-year treasury bills, the most watched rate, recently reached a two-year high of 1.857 percent. Novogratz says 2% seems like a logical target for now, which means there could be more downside for cryptocurrencies.
The Federal Reserve spooked markets by taking an increasingly hawkish stance. Banking giant Goldman Sachs expects the central bank to raise interest rates at least four times this year to combat persistent inflation. Such an aggressive U-turn will likely shake the markets.
JPMorgan CEO Jamie Dimon also recently said the Fed could raise rates up to seven times, but did not mention a specific timeline.
Novogratz recently predicted that Bitcoin would bottom out at $38,000. The leading cryptocurrency has dropped more than 9% this year after gaining 60% in 2021.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.