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Ethereum Is Outperforming Bitcoin, Says Crypto Bull Mike Novogratz

According to Galaxy Digital CEO Mike Novogratz in an interview on Wednesday, Ethereum is outperforming bitcoin as the latter becomes less appealing as an inflation hedge in the face of the Federal Reserve’s hawkishness heading into 2022.

With a fixed supply of 21 million coins, many investors have long regarded the world’s largest cryptocurrency as a hedge against inflation, particularly in the face of unprecedented easy money policies designed to keep the economy afloat during the COVID-19 pandemic. This could be called into question if the US Federal Reserve becomes more hawkish in order to combat inflation next year.

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Novogratz stated on CNBC that as bitcoin loses some of its appeal as a hedge against a depreciating currency, ethereum is outperforming because its supporters see the potential in the solutions enabled by the underlying technology.

“People see ethereum as a technology bet,” said Novogratz. While bitcoin remains the most dominant cryptocurrency, its market share has fallen to around 40%, down from 70%, as investors shift their attention to other digital assets.

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As the Fed stops pumping money into the economy, Novogratz believes ethereum will outperform bitcoin. In any case, the billionaire crypto bull predicts a “monster fourth quarter” on the back of a booming economy.

He also predicted a continuation of the bull run in stocks, which, he added, are trading much more bullishly than crypto.

“Crypto isn’t trading as bullish as equities because you see this tension, that the Fed’s going to take the booze out of the punchbowl much sooner than we thought,” Novogratz said on CNBC’s “Squawk Box” on Wednesday. “In general, that should not be good for risk assets.”