In a recent interview with CNBC, Galaxy Digital founder, Michael Novogratz said that the U.S. is heading for a credit crunch. In light of that argument, he highlighted that it presents a great opportunity to buy into investments such as gold (XAU), silver (XAG), and Bitcoin (BTC). Novogratz stated during the interview,
“We are going to have a credit crunch in the U.S. and globally […] You want to be long gold and silver […] and you want to be long Bitcoin.”
Novogratz pointed out that since banks normally raise capital by making fewer loans, a credit crunch is imminent. Additionally, he emphasized that signs of a recession are already present, such as those in the commodities market. This month, the U.S. banking sector witnessed a new crisis when Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB) all failed within a single week. The outlook for the U.S. banking system was lowered by Moody’s to “negative.”
Novogratz said a change in interest rate policy was coming. He acknowledged that the Federal Reserve would “like to do a dovish hike, just for credibility’s sale.” However, he asserted that doing so would be a “big policy error.” Nonetheless, Novogratz expressed his bullishness regarding the cryptocurrency sector, especially for Bitcoin (BTC), and other investments like gold and silver. He stated,
“If there was ever a time to be in bitcoin and crypto, this is why it was created, in that governments print too much money whenever the pain gets too great, and we’re seeing that.”
Bitcoin and gold going to new heights?
BTC and XAU have shown significant growth over the last week. XAU has risen by almost 4.8% in the last seven days. Gold (XAU) is currently facing resistance at $1927.16, while it has set its support at $1885.44.
On the other hand, BTC has made gains of up to 12.4% in the last week. BTC is currently facing resistance at $25901.14, with support at $23875.71.
Going by their present performance outlooks, both Gold (XAU) and Bitcoin (BTC) seem to be headed upwards. Moreover, both assets are considered to be inflation hedges. Hence, if there is a credit crunch in the United States, assets such as gold, silver, and Bitcoin, are the ones to be invested in. At press time, BTC was trading at $24,405.59, down by 1.7% in the last 24 hours. Meanwhile, gold was trading at $1918.24.