Bitcoin and gold show loss of confidence in fiat, says Galaxy CEO

According to Galaxy Digital founder and CEO Mike Novogratz, the recent rebound in Bitcoin reflects far more than speculative trading, rather it is a direct response to growing macroeconomic instability and a shift in global financial architecture.

Speaking on CNBC’s “Squawk Box” segment Wednesday morning, Novogratz connected Bitcoin’s ( BTC ) recent performance with broader geopolitical and fiscal developments, including a sudden tariff policy announcement, rising interest rates, and evolving strategies in Washington.

The resulting uncertainty is sparking a reevaluation of traditional security and economic systems that have been in place since the post–World War II era.

While Bitcoin typically performs well during macro uncertainty, Novogratz noted the dual nature of the asset. Specifically, it functions both as a geopolitical hedge like gold and as a risk asset reliant on investor adoption.

“Bitcoin broadly does well with these kinds of macro conditions,unless there’s this kind of risk-off,” he said, adding “and when there is chaos, new buyers disappear.”

Despite institutional adoption progressing, retail participation has slowed. The BTC market, according to Novogratz, has seen more short-term trading than long-term accumulation recently.

Bitcoin vs. Gold: who’s buying what, and why

Bitcoin and gold are both “report cards on financial stewardship,” Novogratz said. Notably, the recent gold performance is a reflection of declining confidence in traditional fiat systems. He pointed out that foreign central banks, not retail or institutional investors, are driving recent gold demand.

He also predicted the emergence of a BRICS-backed currency, possibly supported by gold, within the next 24 months. Such moves underscore a global shift away from reliance on the U.S. dollar and Western monetary systems.

The U.S. is acting like an emerging market?

Novogratz warned that the U.S. economy is beginning to behave more like an emerging market than a developed one.

“I’m not saying we’ve gotten there yet,” he said. “It’s the early stages and that should get us all nervous. I’m sure that’s got Secretary Bessant nervous. I’m sure it’s got, you know, people around the white House who understand this nervous.”

He emphasized the irony of pursuing noble goals like reducing inequality and deficits while undermining long-term stability. It is not possible to simply “wish away 30 years” of global trade systems and supply chains.”