Bitcoin, Gold, and a Minsky Moment: Novogratz on the End of Fiscal Complacency
Galaxy Digital CEO warns US market is starting to resemble emerging economies due to rising rates and soaring debt levels
James Van Straten, AI Boost | Edited by Oliver Knight Updated April 17, 2025, 1:49 pm Published April 17, 2025, 10:32 am
What is important to know:
- Bitcoin and gold serve as indicators of financial governance, Novogratz said, highlighting investors' desire for safe haven assets amid shortages and political uncertainty that are undermining confidence.
- The U.S. is beginning to enter uncharted waters with rising interest rates and a weaker dollar, and Novogratz believes the market is finally waking up to America's $35 trillion debt load.
The “Minsky moment” is already here, Mike Novogratz, CEO of Galaxy Digital, said in a recent interview on CNBC. He noted that interest rates are playing a major role in reshaping the global financial landscape, while President Trump’s return to the political arena adds new uncertainty to markets.
While stocks are down about 10% year-to-date, Novogratz believes that's not enough given the scale of the global economic changes underway. “We're clearly in a risk-off environment,” he said.
Novogratz explained that Bitcoin (BTC) typically performs well in times of macroeconomic uncertainty, unless risk appetite completely disappears. He identified two main factors influencing Bitcoin: the macroeconomic environment, reflected in the recent rise in gold prices and the shift of capital out of the U.S. dollar into perceived safe havens; and the adoption story, which is still in its infancy. While institutional and retail adoption continue to evolve, Novogratz noted that Bitcoin is beginning to trade more independently of U.S. equities.
Novogratz also warned that the U.S. is starting to act like an emerging market, a shift not seen in decades. Interest rates are rising and the U.S. dollar is weakening — an unusual and worrisome combination. Bitcoin and gold are indicators of financial management, Novogratz noted.
He cited economist Hyman Minsky and said the U.S. may be approaching a “Minsky moment,” when deficits and debt levels begin to matter. While sovereign nations have long been able to run large deficits without a negative market reaction, that period may be ending.
Novogratz said markets are signaling that Trump’s policies are too aggressive and unsustainable. He pointed to the outsize impact of even a modest rise in Treasury yields on the $35 trillion national debt, noting that a 25- or 50-basis-point increase could have a major impact, potentially costing more on an annualized basis than major austerity programs like the Department of Government Effectiveness.
Disclaimer: This article or parts of it were created using AI tools and reviewed by our editorial team to ensure accuracy and adhere to our standards. For more information, see CoinDesk's full AI policy.
