Mike Novogratz, Galaxy Digital founder and CEO, was frank in his assessment of the current state of cryptocurrencies during his interview on CNBC on June 1.
"Cryptos [are] laxidasical," Novogratz observed, referencing a period of unusual inactivity for the typically volatile digital asset class. He pointed out that this lackadaisical performance is partly due to the absence of substantial institutional excitement. Retail interest remains constant, but institutional players' participation, which Novogratz believes adds depth and gravitas to the market, is waning.
According to Novogratz, the lack of new large-scale buyers is a concern. New adopters of cryptocurrency tend to be smaller players who buy modest amounts on platforms like Robinhood, Revolut or Square. These new buyers, Novogratz notes, are typically long-term holders, or "hodlers," providing some stability to the market. Nonetheless, the absence of significant institutional activity is a notable gap in current market dynamics.While crypto may be in a lackluster phase, Novogratz highlights two significant developments. First, WeChat has enabled Bitcoin and crypto trading to its platform, a move he considers a significant milestone given the scale of the platform. Secondly, Hong Kong has begun officially allowing retail customers to trade crypto on regulated exchanges for the first time, an indication of increasing Asian adoption.
Novogratz concluded with a rather optimistic outlook for the cryptocurrency market, despite the current lack of enthusiasm. He believes that if the Federal Reserve cuts interest rates in response to a potential economic slowdown in the second half of the year, cryptocurrencies, including Bitcoin and Ethereum, could see a significant boost.