Bitcoin may stay in a ‘consolidation phase’ until US election: Novogratz

The upcoming US presidential election may spur bitcoin out of its current “consolidation phase,” according to Galaxy CEO Mike Novogratz.

Crypto will likely stay politicized until more Democrats pivot their anti-segment stance, he argued, meaning a change in administration could be significant for the space.

Novogratz said during a Tuesday earnings call that, following the approval of spot bitcoin ETFs and last month’s block reward halving, he believes bitcoin could keep trading between $55,000 and $75,000 in the near-term. 

The price of bitcoin (BTC) was at about $61,450 at 12:30 pm ET Tuesday.

“I think that’s probably where we are — certainly for this quarter and maybe next quarter — until either the Fed starts cutting rates because the economy finally slows or we get through the election.”

Read more: Macro headwinds could spur a ‘boring’ bitcoin summer — or something worse

The 2024 presidential election is likely to bring clarity to the crypto regulatory landscape as the segment has increasingly been politicized. Joe Biden and Donald Trump are set to face-off in a rematch as they did four years ago.

Just last week, the Biden administration said in a statement that the president would veto a resolution invalidating Securities and Exchange Commission’s Staff Accounting Bulletin (SAB) 121 if it reached his desk. The bulletin, introduced in 2022, says crypto custodians should report a liability and “corresponding assets” on their balance sheets for all custodied cryptocurrencies. 

“It just read to the crypto community as the Democrats saying no to crypto,” Novogratz said of the Biden administration’s comments. “And it’s unfair; there are a ton of Democrats that are pro-crypto…but the power has been held by Elizabeth Warren on the Senate banking committee, [Gary] Gensler and a few others.”

The Galaxy CEO likened Democrats’ crypto opposition to party members bad-mouthing dogs.

“Can you imagine a party coming out and saying we don’t like dogs?” Novogratz said. “It’s just terrible politics, but that’s where we’re at.” 

Forbes pegs the number of US dog owners at 65 million. There could be as many as 93 million crypto owners in America, according to recent estimates by Security.org.  

Pair Biden’s veto possibility with Trump signaling he would be a pro-crypto president, and the differing attitudes become more highlighted. Trump invited Ryan Selkis, founder of crypto data platform Messari, to speak during an event last week at Mar-a-Lago.  

“There was a shift in the Twitter space; there was a shift in people I spoke to saying, ‘Wow, Republicans good, Democrats bad,’” Novogratz said.

“I think that’s kind of dangerous thinking in that broadly, for our industry to thrive, you’re going to need bipartisan support,” he added. “Because you can’t go from one regime to the next and not know where you stand.”

Read more from our opinion section: Only a fool would vote on crypto alone

After the House of Representatives approved the resolution to reverse SAB 121 in a 228-182 vote, it now moves onto the Senate. Along with across-the-board support from House Republicans, 21 Democrats backed it.  

Novogratz said a prospective Senate vote would be the “first litmus test” on whether some Democrats would look to pivot their stance on crypto.   

Though the House has passed several bills out of committee, like the Clarity for Payment Stablecoins Act, it has not held floor votes on them. 

Sens. Cynthia Lummis,  R-Wyom., and Kristen Gillibrand, D-N.Y., brought a new version of their Responsible Financial Innovation Act to the Senate floor last summer, but the bill has not progressed.

Read more: Crypto bill update: What legislation is making its way forward? 

“We’re in an election year, and you’re having a hard time getting Dems and Republicans to do much together,” Novogratz said. “While, for us, this is unbelievably important…broadly it just doesn’t rise to the level of [being] important enough for the mass of Congress to care enough about.” 

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