The U.S. Is Heading For A Credit Crunch, Now Is The Right Time To Buy Gold, Silver And Bitcoin, said Michael Novogratz, founder and CEO of Galaxy Digital.
"We're going to have a credit crunch in the U.S. and globally," Novogratz said in an interview with CNBC. “You want to be long gold and silver and you want to be long bitcoin,” he said. Speaking on CNBC's Squawk Box on March 15, Novogratz noted that banks typically reduce lending to rebuild capital, meaning a credit crunch is looming, noting that indicators such as commodity markets are already signaling a recession.
The U.S. banking industry has been in turmoil this month, with Silvergate Bank, Signature Bank and Silicon Valley Bank all failing in the same week. Moody's downgraded its outlook on the U.S. banking system to "negative." Novogratz told CNBC that there could be a reversal in interest rate policy, saying that while the Fed "would like to raise rates modestly, just for the sake of credibility," doing so would be a "huge policy mistake."
In addition to his forecast of tough times for the U.S. economy, Novogratz also expressed a bullish sentiment on cryptocurrencies, saying: "If there's ever a time for bitcoin and cryptocurrencies, that's why it was created because whenever the pain gets too great, governments print too much money, and we're seeing that."
Bitcoin prices fell after last week's Silicon Valley bank collapse, but managed to hit a new 2023 high of $26,514.72 on March 14, according to CoinMarketCap.
