Bitcoin bull Novogratz says US faces ‘existential crisis’ if it can’t engineer digital dollars soon

Wealthy investor Mike Novogratz says the US has its fate in its hands but will be at a major competitive disadvantage if it doesn’t offer digital dollars soon.

Such a move would be especially important as China fired the first salvo in digital currency, he explained.

“For me, it’s an existential crisis, we need a digital dollar,” Novogratz, chief executive of digital traders bank Galaxy Digital, told MarketWatch in an interview on Friday, ahead of MarketWatch and Barron’s “second phase of” Investing in Crypto “virtual series due to continue on Wednesday.

The digital yuan has long been regarded as not only the evolution of money for China but also a way to compete with the United States and other large advanced economies. The virtual bank now mined by China is controlled by its central bank, which will issue the new electronic money, the Wall Street Journal reported.

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China’s apparent embrace of a digitized yuan has provided some support for the broader digital asset complex, exemplified by bitcoin BTCUSD,
+ 1.03%,
a decentralized cryptographic asset that has long been considered a potential store of value if not a payment system by enthusiasts. At the last check, bitcoin was changing hands at $ 58,477 on CoinDesk.

Novogratz says the United States can control its future right now but noted that Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell will have to “land this supertanker,” referring to the trillions of dollars of spending financial and fiscal measures done to help prevent the worst. of the economic after-effects of the COVID pandemic.

Read: China’s bitcoin conflict contradicts Peter Thiel’s belief that it is a ‘financial weapon’ against the US

“If our fiscal and monetary policy starts to look like it is from the Banana Republic … you’re going to run into some Minsky moment where confidence breaks down,” warned Novogratz. Chicago-born Hyman Minsky, who died Oct. 24, 1996, expressed a view that a period of distortions in the financial system was ultimately coming to a very bad end.

Stock market investors have been worried about a surge in US inflation, which has already created some sluggish trading in the Dow Jones Industrial Average DJIA,
+ 0.56%
and the S&P 500 SPX index,
+ 0.43%
in recent weeks. But record highs for stock index markets on Friday suggest that investors may be accepting the Fed’s expectations for a slow-moving approach to policy normalization and a temporary burst of inflation following the coronary virus crisis.

President Joe Biden was slated to meet bipolar members of Congress on Monday in an effort to win support for his $ 2.4 trillion infrastructure plan, White House press secretary Jen Psaki said Friday, CNBC reported.

Novogratz, meanwhile, said that “no evidence that the Chinese government is buying bitcoin” is much less arming it, referring to recent comments made by angel investor and billionaire Peter Thiel.

Sometimes “he likes to say provocative things,” says Novogratz.

Thiel made a wave on Tuesday when he suggested that bitcoin could be thought of as “partly a Chinese financial weapon against the United States,” because, he argued, bitcoin undermines the US dollar’s status as a world reserve.