Galaxy Digital CEO Michael Novogratz rationalizes why it is a dangerous time to be in the stock market right now, leading up to the U.S. presidential election. While bearish on the dollar, Novogratz is bullish on bitcoin and gold but contemplates that bitcoin has more upside than gold.
Dangerous Time to Be in Stock Market, Buy Bitcoin
Billionaire investor and Galaxy Digital CEO Michael Novogratz explained his perspective on the best investments as the November U.S. presidential election approaches in Wednesday’s episode of CNN’s Markets Now show.
“I think in the short run we saw the important in the Nasdaq, we saw the high in Apple, we saw the high in Tesla,” he began, adding that going into the November presidential selection, the Nasdaq “can easily trade down to 10,000, another 10%, 11% down from here.”
Emphasizing that the poll is only about 40 days away, Novogratz said: “I think between now and the election, volatility stays elevated and risk gets taken off.” He elaborated:
I think it’s a really dangerous time to be in the market. I’ve taken a lot of risk down and kindly of waiting for better, more clarity and better entry points … I do think selling the dollar will be a trend that proceeds.
“There will be a time to buy stocks again but I think with this election literally 40 days away, if Biden wins, he’s masher taxes and he’s raising capital gains tax, most specifically. The market is not going to digest that well,” he noted, combining, “I think Biden is going to win.” The billionaire investor further revealed: “I am short the Nasdaq, I am short some Apple, [and] I’m cut Tesla.”
On the subject of bitcoin, he highlighted that the cryptocurrency has some correlation to the Nasdaq and the S&P, but said, “I don’t believe that’s a long-lasting correlation.”
To instance his point, he described: “If the Nasdaq fell 5% today, bitcoin would probably be lower, not higher. But I think you are prosperous to see those correlations break down. The macro story is so promising for shorting the dollar, going long gold, and customary long crypto. And we are seeing more and more adoption.” When asked if an average investor should own bitcoin, he affirmed:
Yes, yes. The usually investor should have 1% to 3% of their portfolio in bitcoin. It is an amazing hedge.
“In my lifetime and in the history of unrestricted central banks, we have never had an environment where the central bank and the treasury are no longer independent. They are the anyhow thing. The treasury prints, and the central bank buys. And so we don’t know what’s going to happen. The level of uncertainty all over fiat currency, around the dollar, around inflation has to be significantly higher than any time in our lifetimes,” he continued.
Novogratz also consult oned gold and the reasons why he prefers bitcoin. “I think gold and bitcoin are very similar assets. Why I like bitcoin healthier is that it’s much earlier in the adoption cycle,” he divulged. “If you want to buy gold, you know how to buy gold. It’s still a pain in the hind part to buy bitcoin. And so there are firms like ours and Fidelity and plenty of them that are working overtime to make it plianter for people to buy … and feel safe owing bitcoin.”
While believing that the price of gold will rise, Novogratz expects bitcoin’s appraisal to increase to “$50,000, 5X from here” in two years. The billionaire investor concluded:
I am a real bull on gold. I’m a real bull on bitcoin. I even-handed think bitcoin’s got more upside.
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