Novogratz: U.S. Market Risks Resembling Emerging Economy Amid Debt Surge and Rate Hikes
Galaxy Digital CEO Mike Novogratz is sounding the alarm on what he describes as a pivotal shift in the U.S. economy. Speaking with CNBC, Novogratz declared that a “Minsky Moment”—a term for a sudden market collapse following the build-up of financial instability—may already be underway.
He emphasized that the global landscape is being reshaped by rising tariffs and shifting geopolitical alliances, while the re-emergence of Donald Trump in U.S. politics is introducing a new layer of market volatility. Despite a roughly 10% dip in equities so far this year, Novogratz believes markets haven’t fully priced in the scope of these changes. “We’re in a clear risk-off environment,” he noted.
Novogratz pointed to bitcoin (BTC) as a unique asset in this climate, highlighting its resilience amid economic uncertainty. “Bitcoin tends to perform well in volatile macro conditions—unless risk appetite collapses completely,” he said. He framed BTC’s strength around two central narratives: the macro backdrop, evidenced by gold’s recent surge and capital flight from the U.S. dollar; and a slow-burning adoption cycle still gaining momentum. Notably, bitcoin is beginning to decouple from traditional equities, a sign of its maturing role in global finance.
He also cautioned that the U.S. is beginning to exhibit traits more commonly seen in emerging markets: rising interest rates coupled with a weakening dollar. This unusual combination is raising red flags. “Bitcoin and gold are becoming barometers of financial responsibility,” Novogratz remarked.
Referencing economist Hyman Minsky, Novogratz warned that America could be nearing a tipping point where its ballooning deficits and debt can no longer be ignored. The longstanding assumption that sovereign nations can rack up debt without market repercussions is, in his view, no longer guaranteed.
He argued that markets are beginning to react to what they perceive as overly aggressive and unsustainable Trump-era economic policies. Even modest upticks in Treasury yields now carry outsized consequences, Novogratz warned, noting that a 25–50 basis point increase could raise annual interest costs more than the entire budget for some federal agencies.
