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

Mike Novogratz, CEO of Galaxy Digital, recently shared his thoughts on Bitcoin’s potential to reach new all-time highs (ATH), emphasizing that significant changes in macroeconomic conditions are necessary 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 would maintain probably its current trading level. until the Federal Reserve cuts interest rates, which it sees as a bullish signal for the leading cryptocurrency.

Novogratz pointed out that more favorable crypto regulations could also propel Bitcoin to new ATHs. He observed 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, which he sees as unlikely in the near term.

He explained that he expected Bitcoin to trade in a range between $55,000 and $75,000, more precisely between $57,000 and $73,000. Novogratz believes the lower and upper ends of that range have been established, and he predicts upward movement as the election approaches and Federal Reserve Chairman Jerome Powell may consider rate cuts.

Additionally, Novogratz pointed to substantial spending by the U.S. federal government and rising debt as factors that could prompt more investors to turn to Bitcoin, viewing it as “digital gold.” He mentioned that while crypto regulation and national debt are contradictory factors, the latter could actually support Bitcoin’s rise.

He argued that if the Biden or Trump administration tackled the federal budget deficit – which currently stands at 26% of GDP, significantly above the 20% target – it would not bode well for good for Bitcoin. Conversely, he noted that poor policymaking and excessive government spending could benefit Bitcoin’s value, alongside rising gold prices, but at a faster rate due to the status of Bitcoin as a newer technology and product.

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 transitioned to the crypto space in 2013 and brings a wealth of experience in traditional finance and trading. He is particularly known for his on-chain analysis and the development of tools such as the Network Value to Transactions (NVT) ratio, which compares Bitcoin’s market capitalization to trading volume, similar to the price-to-earnings ratio of stocks.

On May 15, 2024, Woo published a notable post on social media platform specifying the components of the global market. the liquidity it analyzed, which includes M2 money stock for CNY, USD, EUR, JPY and GBP. He 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 wide range of liquid assets. It consists of M1 (physical currency, demand deposits, and other verifiable deposits) and additional forms of quasi-money such as savings deposits, small-term deposits (CDs of less than $100,000), and funds 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.

Looking at the M2 money supply for the world’s major currencies – the Chinese yuan (CNY), the US dollar (USD), the euro (EUR), the Japanese yen (JPY) and the British pound (GBP) – Woo estimates the overall liquidity of the world economy. . Its Trading View formula incorporates the M2 money supply for each currency, adjusted for their exchange rates against the US 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 indicating a potential breakout to the upside. This pattern is characterized by a series of higher lows that form an ascending trendline, converging with a horizontal resistance line. When price breaks above the resistance line, it usually signals a strong uptrend. Woo’s expectation of a breakout before October 2024 suggests he anticipates a significant increase in global liquidity, which could propel Bitcoin prices higher.

Woo’s prediction that Bitcoin 2025 will enter the record books implies that he expects these liquidity conditions to create a very favorable environment for Bitcoin, potentially leading to unprecedented price levels.

Featured image via Unsplash

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