Bitcoin billionaire Mike Novogratz says plunging crypto will have a hard time rallying until stocks find a base
Mike Novogratz said cryptocurrencies will struggle to pull out of their sell-off if stocks keep falling.
The crypto billionaire said Thursday this is a bear market, and told people to sell rallies and not buy dips.
The crypto sell-off intensified Friday, as bitcoin fell 10% to a six-month low below $38,000.
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Billionaire investor Mike Novogratz has said cryptocurrencies will struggle to pull out of their sell-off if stocks keep falling, as he urged investors not to buy the dip.
Prices for bitcoin, ether and other digital currencies have fallen sharply across the board as they track Wall Street's rout in tech stocks, driven by pressure from rising bond yields.
"Crypto will have a hard time rallying until stocks find a base," Novogratz, CEO of investment company Galaxy Digital, tweeted late Thursday.
Novogratz pointed to the sharp fall in the Russell index, which is down almost 10% year to date, saying there are 1.2 trillion bad equity longs above the market.
"This is now a bear market," he said, adding: "Sell rallies. Don't buy dips."
Investors have dumped crypto assets and tech stocks this year as they brace for the Federal Reserve to hike interest rates at least four times in 2022. That has pushed up bond yields, as the prospect of higher interest rates prompts investors look for a similarly higher return.
Novogratz warned Tuesday that as long as rates go higher, there will be pressure on crypto assets and the Nasdaq. The tech-heavy stock index has dropped more than 9% in the last month.
Leading cryptocurrency bitcoin has fallen 20% over the last month to trade far below its November record high of more than $68,000. Ethereum's ether is down 30%, also off its all-time high of around $4,800.
Novogratz suggested in his Thursday tweets that there might be a glimmer of hope for markets. "That said, crypto already had a decent sell-off and is running into some buying support," he said.
On Friday, though, the broad crypto slide was picking up steam. Bitcoin was down 9% over the last 24 hours at $38, 274, according to last check of CoinMarketCap data. It had earlier broken through $38,000 to hit $37,704, its lowest level in six months. Meanwhile, ether was 12% lower at $2,795.
Novogratz told CNBC earlier this year that crypto could fall as low as $38,000, and he was waiting for that before buying more. The crypto enthusiast, who has tattoos inspired by different coins, said in May last year that crypto made up 85% of his net wealth.
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