Mike Novogratz, the CEO of Galaxy Digital, recently stated in an interview with CNBC that we have entered the era of the “Minsky Moment.” He emphasized that tariffs are significantly altering the global security landscape, and the return of President Trump to the political arena is injecting new uncertainties into the market.
While equities have dropped approximately 10% this year, Novogratz argues that this decline does not fully reflect the magnitude of global economic changes currently in progress. “We’re clearly in a risk-off environment,” he affirmed.
He elaborated that bitcoin (BTC) often thrives during times of macroeconomic uncertainty—barring a complete depletion of risk appetite. Novogratz articulated two primary narratives influencing bitcoin: the macroeconomic context, illustrated by the recent surge in gold prices and capital moving out of the U.S. dollar into recognized safe havens, and the adoption narrative, which is still in its nascent stages. Despite gradual progress in both institutional and retail adoption, he has noticed that bitcoin is beginning to show signs of trading more independently of U.S. equities.
Novogratz also cautioned that the behavior of the U.S. is starting to resemble that of an emerging market, a transformation that hasn’t been witnessed in decades. Rising interest rates coupled with a weakening U.S. dollar present an unusual and concerning scenario. He remarked that both bitcoin and gold serve as indicators of financial stewardship.
Citing economist Hyman Minsky, Novogratz suggested that the U.S. could be nearing a “Minsky Moment,” where issues related to deficits and debt become significant. Historically, sovereign nations have managed to run substantial deficits without facing market repercussions, but that period of leniency may be coming to an end.
According to Novogratz, the market signals indicate that the policy agenda driven by Trump is overly aggressive and unsustainable. He highlighted the vast implications even minor increases in treasury yields can have on the $35 trillion national debt, asserting that a mere 25 or 50 basis point hike could result in annual costs exceeding those of major savings programs like the Department of Government Efficiency.
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