Mike Novogratz sees crypto support price level sooner than in US equities. Here is your biggest clue: cryptocurrencies are risk assets similar to technology stocks.

The name given to these new technology assets is misleading. Cryptocurrencies are not currencies where the latter has a liability claim on the central bank issuing them. So cryptocurrencies have no claim on central banks, unlike Central Bank Digital Currencies CBDC, which has a claim on the issuer, the central bank. Put another way. Cryptocurrencies are not money, legal tender with a liability claim on the central bank. 

cryptocurrencies are risk assets similar to technology stocks


So cryptocurrency investors are no different from technology investors, where the value is derived from the utility of its underlying technology, the blockchain, and the finite capacity of its network. 

Frankly, investing should be as classic as the classics, where utility plus scarcity equals value. 

The above maxim applies to low-value commodities to the most advanced value-added technology with utility. But be careful with technology investing. You have got to understand it, not get blinded by pseudoscience, and identify a scenario where the technology was applied with success. If technology can reduce business costs and, or increase revenue, then it is likely to be hot.

Back to Mike Novogratz sees crypto support, should the advice of a billionaire be taken more seriously than anyone else. What if Mike Novogratz is a lucky idiot?

Exhibit one, see Mike Novogratz his Luna tattoo here.

A dialogue between a billionaire and a Nobel prize-winning scientist comes to mind. 

“If you are so clever, why are you so poor?” said the billionaire to the Nobel prize-winning scientist.

“If you are so rich, why are you so stupid?,” replied the scientist to the billionaire.


If technology can reduce business costs and, or increase revenue, then it is likely to be hot


So Luna did not make it to the moon. It did not even crash land on the tree tops. Think about it. How can you stake something that is not legal tender and earn interest? Only central bank-backed legal tender earns interest. Other less liquid assets such as stocks earn dividends, bonds earn yields, cryptocurrencies earn gas fees, and real estate can provide rental income. 

The Luna collapse is an example of the herd following a billionaire, with a Luna tattoo, and where price is driven by the greater fool theory. 

The lesson here is don’t follow, anyone including billionaires blindly. 

“Today, we are notifying you that Celsius is suspending all withdrawals, Swaps, and transfers between accounts due to unusual market conditions”
Celsius Website

So for what it is worth, Mike Novogratz sees crypto support. Mike Novogratz, the founder, and chief executive officer of Galaxy Digital Holdings Ltd, said that cryptocurrencies are closer to a “bottom” than the US equity market. 

Crypto has been especially hit hard with the lending platform Celsius halting withdrawals on Monday.

Celsius Network is a regulated, SEC-approved lending platform that allows customers to earn interest on their crypto deposits or take out crypto-collateralized loans. 

“Today, we are notifying you that Celsius is suspending all withdrawals, Swaps, and transfers between accounts due to unusual market conditions.” Celsius said in a post on its website on Sunday, “We are making this move today to put Celsius in a stronger position to honor its withdrawal obligations over time,” wrote Celsius on its website.

Bitcoin, the largest digital asset, fell as much as 9.11% to $22,376, while smaller rival Ether dropped by 7.68% to $1,188. More than one trillion US dollars has been wiped off the crypto market capitalization, at the time of writing this piece.

“Ethereum should hold around $1,000, and it’s $1,200 right now. Bitcoin is around $20,000, $21,000, and it is $23,000, so you are much closer to the bottom in crypto than you are where I think stocks are going to have another 15% to 20%” decline, said Mike Novogratz at the Morgan Stanley Financials Conference.

Again take it for what it is worth, not long ago, Mike Novogratz was saying that Bitcoin should hold support at 40,000 US dollars.

Frankly, these markets have been uninvestable since cost-push inflation, driven by geopolitics, pushing core inflation in the US above 8%.

Food and energy costs continue to squeeze households. Fed hiking will do nothing to increase food and energy production. More expensive credit will be another headwind on the economy, which could tip it into a depression.

Demand for freight has collapsed, and energy costs are making it challenging for truckers to break even Fed hiking will drive a wave of bankruptcies which could further disrupt supply chains.

There could be a few rate hikes, 100 basis points increase, from a 1928 stock market crash where investors and pension funds are wiped out. Economic collapse and social unrest would likely follow as supply chains collapse, bankruptcies soar, and banks start failing. The next curfews might not be due to a pandemic but to social unrest.

“Until I see the Fed flinch, until I think, OK the economy is so bad, and the Fed is going to have to stop hiking and even think about cutting, I don’t think it is time to deploy lots of capital,” said Mike Novogratz.

Indeed, never in the history of humanity have so many souls been at the mercy of the Federal Reserve. With the system so shackled with debt, the Fed has got a firm choke hold on the world’s largest economy. Just a slight squeeze , and we all go down. If the Fed is part of the WEF build back better, you’ll own nothing and be a happy gang then we can kiss our assets goodbye.

To build a new system, you first take a wrecking ball to the old system.

Mike Novogratz sees crypto support price, but unless you are part of the club, nobody really knows.

Survival mode means lying low, saving energy and capital, and letting the fog settle until you have some idea of the road ahead. Apprehension sums up the mood.