Wealthy investor Mike Novogratz says the US has its fate in its hands, but that it will have a major competitive disadvantage if it does not come up with a digital dollar soon.
Such a move would be particularly important as China fired its first salvo on the digital currency front, he explained.
“For me it’s an existential crisis, we need a digital dollar,” said Novogratz, chief executive of Galaxy Digital GLXY.
told MarketWatch in a Friday interview, ahead of the second part of a MarketWatch and Barron’s “Investing in Crypto” series for virtual events that continues Wednesday.
The digital yuan has long been seen not only as the evolution of money for China, but also as a way to compete with the US and other major developed economies. The virtual yuan, which is now being minted 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 given some support to the broader digital asset complex, as illustrated by bitcoin BTCUSD.
a decentralized cryptographic asset that has long been seen as a potential store of value if not a payment system by enthusiasts. At the last survey, bitcoin changed hands on CoinDesk $ 58,477.
Novogratz says the US can currently control its future, but noted that Finance Minister Janet Yellen and Federal Reserve Chairman Jerome Powell “must land this supertanker”, citing the billions of dollars in monetary and fiscal spending done to help ward off the worst. of the economic aftershocks of the COVID pandemic.
Read: China’s bitcoin repression contradicts Peter Thiel’s conviction that it is a ‘financial weapon’ against the US
“If our fiscal and monetary policy of a banana republic looks like this … you will at some point encounter a Minsky moment where confidence breaks,” Novogratz warned. Chicago-born Hyman Minsky, who died on October 24, 1996, believes that a period of distortions in the financial system is ending very badly.
Stock market investors fear a surge in US inflation, which has already caused some volatility in trading in Dow Jones Industrial Average DJIA,
and the S&P 500 index SPX,
in recent weeks. But a record high for stock markets on Friday suggests that investors may accept the Fed’s expectations for a slow-moving approach to policy normalization and a short-lived outbreak of inflation following the coronavirus crisis.
President Joe Biden would meet with two members of Congress on Monday in an effort to gain support for his $ 2.4 billion infrastructure plan, White House Press Secretary Jen Psaki said Friday, CNBC reported.
Meanwhile, Novogratz said there was “zero evidence that the Chinese government does not buy bitcoin, and that it uses far fewer weapons, citing comments made recently by angel investor and billionaire Peter Thiel.”
Sometimes he ‘likes to say provocative’, Novogratz said.
Thiel made headlines on Tuesday when he suggested that bitcoin could be considered “partly a Chinese financial weapon against the US”, as bitcoin undermines the status of the US dollar as the world’s reserve currency.