Dovish Fed Could Boost Bitcoin to $200k While Undermining Dollar Stability, Warns Novogratz

The Galaxy Digital CEO has reiterated that Bitcoin could surge to $200,000 if the next U.S. Federal Reserve chair adopts an exceptionally dovish monetary policy, a scenario he described as the “potential biggest bull catalyst” for the cryptocurrency. Mike Novogratz emphasized that aggressive rate cuts by a Fed chair aligned with Trump’s economic vision could trigger a “blow-off top” for Bitcoin, driven by a shift in investor capital from traditional assets like bonds to riskier alternatives such as crypto and gold Bitcoin Price Prediction: Novogratz Sees $200K if Trump’s Fed …^[1]. This prediction hinges on the Fed’s potential departure from its current stance, with Novogratz noting that markets often underprice extreme outcomes until they materialize Bitcoin’s Path to $200K: Galaxy Digital CEO Unveils The ... - BTCC^[2].

The Fed’s recent 25-basis-point rate cut in September 2025, marking its first easing since December 2024, has already signaled a pivot toward accommodative policy. Novogratz highlighted that such measures reduce the appeal of low-yield assets like bonds, redirecting capital toward Bitcoin and equities. However, he warned that sustained rate cuts could weaken the U.S. dollar, exacerbating inflationary pressures and further boosting demand for Bitcoin as an inflation hedge Bitcoin Recovers Boosted by Fed Dovish Stance: What is Next for …^[3]. The current Bitcoin price of approximately $109,570, while up slightly post-rate cut, remains below the $120,000 level reached earlier in 2025, suggesting the market has yet to fully absorb the implications of the Fed’s policy shift Bitcoin To $200K? Galaxy Digital CEO Reveals The ‘Biggest Bull …^[4].

President Trump’s shortlist for the Fed chair includes Kevin Hassett, Christopher Waller, and Kevin Warsh, all of whom are seen as dovish candidates. Waller, already a Fed Governor, had advocated for a rate cut as early as July 2025—two months before the official decision—underscoring the potential for a more aggressive dovish tilt under a Trump-appointed chair. Novogratz stressed that while markets have priced in some dovish expectations, the full impact will likely only materialize once the new chair is officially confirmed and begins implementing rate cuts Mike Novogratz says Trump-picked Fed dove could send Bitcoin …^[5].

The potential fallout from a dovish Fed extends beyond Bitcoin. Novogratz argued that excessive rate cuts could undermine the Fed’s independence, triggering panic in traditional markets and accelerating capital flows into crypto. He cited historical parallels, such as the 2020 pandemic-driven rate cuts that propelled Bitcoin from $7,000 to $28,000 within months, as evidence of the Fed’s outsized influence on crypto cycles. However, he cautioned that such a scenario would be detrimental to the U.S. economy, with the dollar’s weakness potentially destabilizing global financial systems Here is Why the Next Fed Chairman Could Ignite Bitcoin^[6].

Institutional adoption and regulatory clarity are also cited as foundational factors underpinning Bitcoin’s long-term trajectory. The approval of Bitcoin ETFs and legislative efforts like the Genius Act and a potential market structure bill are seen as catalysts for broader institutional participation. Novogratz noted that major players such as BlackRock are increasingly allocating capital to crypto, signaling a shift from speculative retail-driven dynamics to a more structured, institutional-led market Bitcoin and Fed Rate Cuts: Why the “Rate Effect” Is Overhyped?^[7].