Bitcoin, Gold, and the Minsky Moment: Novogratz on the End of Fiscal Complacency

Galaxy Digital CEO warns U.S. market is starting to behave like an emerging economy amid rising rates and soaring debt.

Updated Apr 17, 2025, 10:33 a.m. Published Apr 17, 2025, 10:32 a.m.

The "Minsky Moment" is here, according to Mike Novogratz, CEO of Galaxy Digital, in a recent interview on CNBC. Novogratz noted that tariffs are playing a key role in reshaping the global security apparatus, while President Trump’s return to the political scene is introducing fresh uncertainty into the markets.

Although equities are down roughly 10% year-to-date, Novogratz believes that’s insufficient given the scale of the global economic shifts underway. “We’re clearly in a risk-off environment,” Novogratz said.

Novogratz explained that bitcoin (BTC) typically performs well amid macroeconomic stress unless risk appetite completely evaporates. He outlined two major narratives driving bitcoin: the macro story, reflected in gold's recent rally, capital flowing out of the U.S. dollar into perceived safe havens; and the adoption story, which remains in its early stages. While institutional and retail adoption is still developing, Novogratz observed that bitcoin is beginning to trade more independently of U.S. equities.

Novogratz also warned that the U.S. is starting to behave like an emerging market, a shift not seen in decades. Interest rates are rising while the U.S. dollar weakens an unusual and concerning combination. While, bitcoin and gold are report cards on financial stewardship, Novogratz remarked.

Novogratz referenced economist Hyman Minsky and said the U.S. could be approaching a "Minsky Moment," where deficits and debt levels finally matter. While sovereign nations have long been able to run large deficits without market backlash, that grace period may be ending.

According to Novogratz, markets are signaling that the Trump-led policy push is too aggressive and unsustainable. Novogratz pointed to the enormous impact of even modest treasury yield increases on the $35 trillion national debt—saying that a 25 or 50 basis point hike has massive implications, potentially costing more on an annualized basis than major savings programs like the Department of Government Efficiency.

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James Van Straten

James Van Straten is a Senior Analyst at CoinDesk, specializing in Bitcoin and its interplay with the macroeconomic environment. Previously, James worked as a Research Analyst at Saidler & Co., a Swiss hedge fund, where he developed expertise in on-chain analytics. His work focuses on monitoring flows to analyze Bitcoin's role within the broader financial system. In addition to his professional endeavors, James serves as an advisor to Coinsilium, a UK publicly traded company, where he provides guidance on their Bitcoin treasury strategy. He also holds investments in Bitcoin, MicroStrategy (MSTR), and Semler Scientific (SMLR).

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