Novogratz: Dovish Trump Fed Could Catapult Bitcoin to $200K—But America Pays the Price

Bitcoin's rocket ride gets political fuel as monetary policy shifts threaten economic stability.

The Fed's Dangerous Gamble

Michael Novogratz warns a Trump-appointed Federal Reserve favoring loose monetary policy would send Bitcoin soaring past $200,000—while potentially gutting the dollar's strength. The crypto billionaire sees inflationary policies creating perfect conditions for digital asset inflation, mirroring historical patterns where fiscal irresponsibility fuels alternative asset rallies.

Monetary Policy Meets Digital Gold

Interest rate cuts and quantitative easing would flood markets with cheap capital, pushing investors toward inflation-resistant assets. Bitcoin's fixed supply makes it a natural hedge against currency devaluation—a feature that becomes increasingly valuable as traditional financial safeguards erode. The very policies meant to stimulate short-term growth could undermine decades of economic stability.

Wall Street's Ironic Dilemma

Traditional finance firms now face their own creation: an asset class that thrives when their conventional strategies fail. Banking institutions that spent years dismissing cryptocurrency suddenly court crypto ETFs—all while their fundamental business model faces existential threat from the policies they champion. Nothing says financial innovation like betting against your own system's stability.

The $200,000 question isn't if Bitcoin can reach new heights, but whether America's economy can survive the ascent.

Trump’s Fed chair decision creates market uncertainty

Novogratz said the potential scenario of TRUMP appointing an extremely dovish Fed chair represents Bitcoin’s most significant bullish catalyst.

He described a situation where “Fed’s cutting when they shouldn’t be, and you put in a massive dove,” leading to what he called a “blow-off top” moment for Bitcoin.

The Galaxy CEO noted that markets have partially priced in expectations of Trump choosing a dovish candidate, but uncertainty remains about how extreme the appointment might be.

Trump has reportedly narrowed his Fed chair shortlist to three candidates: WHITE House economic adviser Kevin Hassett, Federal Reserve Governor Christopher Waller, and former Fed Governor Kevin Warsh.

Economic consequences vs. crypto benefits

Novogratz expressed conflicted feelings about the scenario that could drive Bitcoin to new heights.

Even though he acknowledged the massive bullish potential for cryptocurrency markets, he called the underlying economic conditions “really shitty for America” and warned about the potential loss of Fed independence.

A dovish Fed stance typically weakens the U.S. dollar and boosts risk assets, such as Bitcoin, as traditional investments like bonds and term deposits become less attractive.

This creates a feedback loop where currency debasement drives investors toward alternative stores of value.

The Galaxy CEO’s prediction shows concerns about monetary policy extremes and their impact on asset markets.

Novogratz suggested that the market won’t fully react to this scenario until an official announcement is made.