Galaxy Digital CEO Novogratz Declares Minsky Moment Amid 10% Year-to-Date Equity Decline

Mike Novogratz, CEO of Galaxy Digital, has declared that the "Minsky Moment" has arrived, marking a significant shift in the global economic landscape. In a recent interview, Novogratz highlighted the role of tariffs in reshaping global security dynamics and the uncertainty introduced by the return of President Trump to the political scene. Despite equities being down roughly 10% year-to-date, Novogratz believes this decline is insufficient given the magnitude of the ongoing economic changes. He emphasized that the current environment is clearly "risk-off."

Novogratz explained that bitcoin (BTC) tends to perform well during macroeconomic stress, unless risk appetite completely disappears. He identified two key narratives driving bitcoin: the macro story, which mirrors gold's recent rally as capital flows out of the U.S. dollar into safe havens, and the adoption story, which is still in its early stages. While institutional and retail adoption of bitcoin is developing, Novogratz noted that bitcoin is beginning to trade more independently of U.S. equities.

Novogratz also warned that the U.S. is starting to exhibit characteristics of an emerging market, a shift not seen in decades. This is evident in the unusual combination of rising interest rates and a weakening U.S. dollar. He remarked that bitcoin and gold serve as report cards on financial stewardship. Novogratz referenced economist Hyman Minsky, suggesting that the U.S. could be approaching a "Minsky Moment," where deficits and debt levels finally matter. While sovereign nations have historically been able to run large deficits without market backlash, this grace period may be coming to an end.

According to Novogratz, markets are signaling that the Trump-led policy push is too aggressive and unsustainable. He pointed out the enormous impact of even modest treasury yield increases on the $35 trillion national debt, stating that a 25 or 50 basis point hike has massive implications. This could potentially cost more on an annualized basis than major savings programs like the Department of Government Efficiency. Novogratz's insights underscore the growing concerns about the sustainability of current fiscal policies and the potential for a significant economic shift in the near future.