In a recent interview with CNBC, according to Mike Novogratz, CEO of Galaxy Digital, “Minsky Moment” is here. Novograts said tariffs play a key role in reshaping global security equipment, but President Trump’s return to the political scene is to introduce new uncertainty in the market.
Stocks have fallen by around 10% since the start of the year, but Novogratz believes it is insufficient given the ongoing scale of global economic change. “We are clearly in a risk-off environment,” Novograts said.
Novogratz explained that Bitcoin (BTC) usually works well amidst macroeconomic uncertainties, unless the risk appetite evaporates completely. He outlined two major stories that drive Bitcoin. A macro story reflected in Gold’s recent rally, capital flowing from the US dollar has flowed into perceived safe shelters. And the story of adoption remains in its early stages. Although institutional and retail adoption is still developing, Novograts observed that Bitcoin is trading independently of US stocks.
Novograts also warned that the US is beginning to act like an emerging market. This is a change that has not been seen in decades. Interest rates are rising, but the US dollar weakens the unusual and concerning combination. Meanwhile, Bitcoin and Gold are report cards on financial management, Novograts said.
Novograts mentioned economist Heyman Minsky, saying the United States could be approaching a “minsky moment.” Sovereign countries have long been able to run a major deficit without market rebound, but that bounty period may be over.
According to Novograts, the market shows that pushing Trump-led policies is too aggressive and unsustainable. Novograts pointed to the major impact of the modest Treasury increase in yields on $35 trillion citizen debt. Increases of 25 or 50 basis points can have a significant impact and could cost more on an annual basis than major savings programs such as government efficiency.
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