Speaking in a recent interview, he said such a move would create “the biggest bull catalyst” for crypto, possibly driving Bitcoin toward $200,000.
Novogratz warned, however, that what would ignite a rally for digital assets would also spell trouble for the U.S. economy. A central bank that slashes rates too aggressively could weaken the dollar, compromise the Fed’s independence, and trigger what he called an “oh shit moment” for markets. In that scenario, gold and Bitcoin would both surge.
Bitcoin is currently trading above $109,000, and analysts suggest policy shifts could soon play a larger role in shaping its trajectory. PGIM economist Daleep Singh has echoed similar concerns, noting that the Fed’s makeup may change significantly after Powell’s term ends in May 2026, with risks skewed against the dollar.
Trump has already signaled he wants a more dovish stance at the Fed, naming economic adviser Kevin Hassett, Fed Governor Christopher Waller, and former Governor Kevin Warsh as his shortlist of potential replacements. While markets largely expect continuity, Novogratz believes traders won’t fully price in the risk until the decision is official.
The timing of such a change could prove crucial. The Fed has already delivered a 25-basis-point rate cut this September, its first since the tightening cycle that began in 2022. Another wave of aggressive easing would likely lower yields across traditional safe havens, creating a stronger narrative for investors to rotate into Bitcoin and other risk assets.
Still, Novogratz was clear about the trade-off: a weaker dollar and a less independent Fed might fuel speculative booms but would damage the long-term health of the U.S. economy. That tension – between what benefits crypto markets and what harms America’s financial stability – is at the heart of his warning.
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