Galaxy Digital CEO explains what needs to happen for Bitcoin to set new all-time highs

Mike Novogratz, the CEO of Galaxy Digital, recently shared his insights on Bitcoin’s potential to reach new all-time highs (ATH), emphasizing that significant changes in macroeconomic conditions are needed to achieve such a milestone. In a recent interview on the Galaxy podcast, the billionaire – who is the 1,368th richest person in the world with a net worth of $2.5 billion (as of May 18, 2024), according to Forbes – expressed his belief that Bitcoin likely will maintain its current level of trading. range until the Federal Reserve cuts interest rates, which he sees as a bullish sign for the leading cryptocurrency.

Novogratz pointed out that more favorable crypto regulations could also push Bitcoin to new all-time highs. He noted that the prevailing narrative of an economic slowdown could benefit Bitcoin. However, he remains skeptical that Bitcoin will surpass its previous high of $73,000 without Fed intervention or a major regulatory breakthrough, both of which he sees as unlikely in the near term.

He outlined his expectation that Bitcoin will trade in a range between $55,000 and $75,000, more specifically between $57,000 and $73,000. Novogratz believes both the lower and upper bounds of this range have been established and expects an upward move as the election approaches and Federal Reserve Chair Jerome Powell may consider rate cuts.

Additionally, Novogratz pointed to substantial U.S. federal government spending and rising debt as factors that could push more investors into Bitcoin as “digital gold.” He argued that although cryptocurrency regulation and national debt are competing factors, the latter could actually support Bitcoin’s rise.

He argued that if the Biden or Trump administrations addressed the federal budget deficit – which currently stands at 26% of GDP, significantly above the 20% target – that would not bode well for Bitcoin. Conversely, he noted that bad policy and excessive government spending could be beneficial to Bitcoin’s value, alongside rising gold prices but at a faster pace due to Bitcoin’s status as a newer technology and commodity .

Willy Woo, a respected figure in the cryptocurrency community, is renowned for his data-driven market analysis and predictive insights. Founder of The Bitcoin Forecast newsletter, Woo moved into the crypto space in 2013 and brings with him extensive experience in finance and traditional trading. He is particularly known for his on-chain analysis and developing tools such as the Network Value to Transactions (NVT) ratio, which compares Bitcoin’s market capitalization to transaction volume, similar to the price-to-earnings ratio of stocks .

On May 15, 2024, Woo posted a major insight on social media platform topic specifying the components of the global crisis. liquidity he was analyzing, which includes the M2 Money Stock for CNY, USD, EUR, JPY and GBP. He has provided a detailed formula for tracking this liquidity using Trading View tickers.

To understand Woo’s analysis, it is essential to understand what M2 represents in economics. M2 is a measure of money supply that includes a large set of liquid assets. It consists of M1 (physical currency, demand deposits, and other check deposits) and additional forms of similar money such as savings deposits, small deposits (CDs under $100,000), and retail money market mutual funds. M2 provides a more comprehensive view of the money supply than M1 alone, making it a crucial indicator for economists and policymakers.

By examining the M2 money stock for major global currencies – Chinese Yuan (CNY), US Dollar (USD), Euro (EUR), Japanese Yen (JPY) and British Pound (GBP) – Woo assesses overall liquidity in the global economy. Its Trading View formula incorporates the M2 money stock for each currency, adjusted for exchange rates against the dollar, and aggregates them to provide a unified measure of global liquidity.

Woo mentions the concept of a “bullish ascending triangle,” a technical analysis pattern that indicates a potential upside breakout. This pattern is characterized by a series of rising lows that form an ascending trend line, converging with a horizontal resistance line. When the price breaks above the resistance line, it typically signals a strong uptrend. Woo’s expectation of a breakout before October 2024 suggests he expects significant increases in global liquidity, which could push Bitcoin prices higher.

Woo’s prediction that Bitcoin 2025 will be a record-breaking year implies that he expects these liquidity conditions to create a highly favorable environment for Bitcoin, potentially leading to unprecedented price levels.

Featured image via Unsplash

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