Novogratz: "Bitcoin, difficult to reclaim $100,000"

▲ Bitcoin (BTC), decline, bear market/ChatGPT generated image

An analysis suggests that the process for Bitcoin (BTC) to reclaim the $100,000 mark will not be easy in the current macroeconomic environment. A prominent figure in the virtual asset industry pointed out the grim reality of the market, citing inflation and interest rate policies.

According to a Bloomberg report on April 28 (local time), Michael Novogratz, CEO of Galaxy Digital, stated during a Tuesday earnings conference call that central bank monetary easing policies must precede Bitcoin's ability to surpass the $100,000 mark for the first time since early November last year. Novogratz predicted that the Federal Reserve (Fed) would maintain a wait-and-see approach without policy changes for the time being, due to the increased possibility of worsening inflation figures in the aftermath of the war with Iran.

Galaxy Digital recorded a net loss of $216 million in the first quarter, but its performance improved compared to market expectations. Revenue decreased by 22% year-over-year to $10 billion, surpassing analysts' estimates of $8.8 billion. To defend against losses from declining virtual asset prices, Galaxy Digital has embarked on a business transformation towards data centers for artificial intelligence (AI). It has converted existing mining facilities into high-performance computing infrastructure, securing clients like CoreWeave. Currently, approximately 28% of Galaxy Digital's total capital of $2.8 billion is invested in the data center segment.

Novogratz identified Hyperliquid as a model demonstrating the future of the virtual asset market. Hyperliquid is a blockchain that allows trading of perpetual futures linked to real assets such as oil, silver, and the S&P 500 index. Novogratz explained that Galaxy Digital reduced its losses by increasing its exposure to Hyperliquid, stating that assets with clear economic models, unlike simple collaboration-focused tokens, will lead the market in the future. Galaxy Digital expects to generate tangible profits from its AI infrastructure business starting this quarter.

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