Galaxy Digital’s Mike Novogratz Bullish on Bitcoin, Names Three Tailwinds for Leading Crypto Asset

Galaxy Digital’s Mike Novogratz remains bullish on Bitcoin (BTC) despite the flagship cryptocurrency’s lackluster performance over the last few weeks. 

In a new interview on CNBC, Novogratz explains why Bitcoin is not trading as well as Ethereum (ETH) right now.

“If you look at the Ethereum price, Ethereum still trades bullish. People see Ethereum as a technology bet and Bitcoin as a debasement of fiat currency bet.”

In spite of BTC’s weak price action, Novogratz continues to be optimistic about the prospects of Bitcoin as he names three macro tailwinds that can keep the king crypto from falling below the $40,000 level. 

“There are new players lining up to participate in this crypto economy, from the Mid East to all over the US to pension funds and so there’s a bid below the market. It’s an institutional bid. They’ve done their work. They’re waiting to participate.

I think people now have woken up that crypto is an asset class. That Bitcoin is part of a crypto portfolio. That even if the Fed starts acting more hawkish, it’s an amazingly complicated plane to land for Powell and Yellen.

We’ve got a political environment that wants to spend more money. We have a monster budget deficit and if you raise rates too fast, you’re going to sink the economy, and no politician wants to do that and so we lost [an] apolitical Fed chairman.

All Fed chairmen are now political just based on the deficit. This idea of independent central banking is now farce, and so Powell can act tough for a while because he just got reappointed, but if he starts doing things that put Biden’s reelection at risk, you’re going to hear something.”


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ZK-rollups step into the limelight after the quest to scale Ethereum evolves

Scalability on the Ethereum (ETH) network has been a point of contention within the cryptocurrency ecosystem for years, primarily due to high fees and network congestion during periods of peak demand.

The latest solution to emerge as the final fix to Ethereum’s scalability woes are Zero-knowledge rollups (ZK rollups), a form of scaling that runs computations off-chain and submits them on-chain via a validity proof.

Earlier in the year, protocols that opted to use optimistic rollups such as Optimism and Arbitrum dominated the headlines and were touted as the best solution to scaling on Ethereum, but aside from Arbitrum, the hype for those protocols has quieted down and traders have pointed out that even optimistic rollups have higher than desirable fees when the network is under peak demand.

Early successes in 2021

At the same time that optimistic rollup solutions were in the spotlight, protocols that adopted the ZK rollups model quietly demonstrated their capabilities.

dYdX, a decentralized perpetual and futures exchange, was one of the earliest adopters of ZK-rollup technology through its partnership with StarkWare, whose StarkNet network is a permissionless decentralized ZK-Rollup.

To date, the platform has seen a decent amount of success and at times managed to process a higher 24-hour trading volume than Coinbase.

Loopring (LRC) is another protocol that has utilized ZK-rollups to decrease transaction costs and speed up its throughput capabilities, which has helped drive the price of LRC to a new all-time high of $3.83 in early November.

LRC/USDT 1-day chart. Source: TradingView

Related: Ethereum layer-two TVL reaches all-time high

ZK-rollups could be the next “rotation” for traders

Following last week’s sharp market-wide sell-off, ZK-rollups have reemerged as a buzzword in crypto sector.

Polygon, a layer-two platform for the Ethereum network, made headlines with the announced acquisition of Mir, a project developing two subcategories of zero-knowledge proofs known as PLONK and Halo.

The 250 million MATIC token investment by Polygon, which already offers some of the lowest fees of any protocol on the Ethereum network, was done in an effort “to explore and encourage all meaningful scaling approaches and technologies at this stage,” according to Polygon co-founder Sandeep Nailwal.

Another much-anticipated protocol that has been gaining traction recently is zkSync, a scaling solution created by Matter Labs that secured $50 million in a Series B round led by Andreessen Horowitz in early November.

zkSync total deposits vs. total unique users

According to Digital Delphi, the two main projects that are live on zkSync is ZigZag, a decentralized exchange, and a funding platform called Gitcoin.

Analysts at Delphi Digital said,

“According to

L2 fees, token swaps through ZigZag on zkSync have the lowest fees.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.