In a recent interview with Bloomberg, Galaxy Digital CEO Michael Novogratz expressed caution regarding potential corrections and consolidation in the cryptocurrency market before reaching new highs. Novogratz emphasized the need for vigilance, especially in dealing with Bitcoin (BTC), suggesting the likelihood of short-term shifts in its trajectory.
Novogratz conveyed his concerns, stating, “I wouldn’t be surprised to see some corrections and some consolidation. If it [Bitcoin] corrects, it might correct to the mid-$50,000s, before taking off to the new high.”
The ongoing market rally was characterized by Novogratz as a phase of “price discovery,” attributed to the introduction of spot Bitcoin exchange-traded funds (ETFs). These ETFs have attracted a significant influx of new investors and traders. As of the interview, BTC has experienced a surge of over 40% since the beginning of the year, surpassing the $60,000 mark on Feb. 28.
Drawing parallels to the 2021 cycle, Novogratz noted that institutional players currently hold less leverage, while retail traders are heavily leveraged, primarily due to offerings from offshore crypto exchanges. He expressed his apprehensions, stating, “I think the market is too leveraged right now. There will be a washout. People can’t sustain this much leverage.”
Despite these concerns, Novogratz maintains a positive outlook for the crypto market. He anticipates potential approval for spot Ethereum ETFs from the U.S. Securities and Exchange Commission later this year. Notably, Galaxy Digital, in collaboration with Invesco, is among the entities actively seeking approval to offer an Ethereum ETF.
