Mike Novogratz Remains Bullish on Bitcoin Amid US Fiscal Deficits

Mike Novogratz, founder and CEO of Galaxy Digital, maintains a bullish stance on Bitcoin (BTC) despite a generally subdued crypto market. He attributes this optimism to ongoing fiscal deficits in the United States, which he believes will eventually bolster Bitcoin's value.

Recent data from market strategist Charlie Bilello reveals that in July, the US federal government recorded an income of $334 billion against expenditures of $766 billion, resulting in a staggering $432 billion deficit. Novogratz commented on the alarming nature of these figures, emphasizing the need for fiscal discipline and the challenges posed by ongoing conflicts and a Congress that fails to impose spending limits.

He connects the rising national debt to inflation trends observed over the past decade, suggesting that the government's inability to manage its spending habits will ultimately support Bitcoin's resurgence. Novogratz's perspective highlights how persistent budget imbalances reinforce his long-term positive outlook on the leading cryptocurrency.

New Insights from Rick Rieder of BlackRock

As of July 2026, the Consumer Price Index (CPI) stands at 3.4% year-over-year, aligning with Wall Street expectations. Rieder suggests that while inflation appears manageable, further rate hikes may not significantly impact the remaining gap to the Fed's 2% target.

BlackRock's analysis indicates that month-to-month core CPI volatility is returning to pre-pandemic levels, suggesting more predictable price pressures. Five-year inflation breakevens are currently near the Fed's 2% core PCE target.

Rieder emphasizes that the focus should shift to labor-market dynamics, as components like shelter and services continue to drive CPI above target, responding slowly to interest rate changes. This raises concerns about the effectiveness of further rate hikes, which could inadvertently harm the economy without addressing the root causes of inflation.

Equity investors should note that sectors sensitive to employment trends may be more affected by jobs data than CPI figures moving forward.

New Insights on Bitcoin ETF Holdings

• The recent analysis of Bitcoin ETF positions revealed a total of $16.3 billion, with filings occurring from August 12 to August 14.
• JPMorgan increased its ordinary spot-ETF units by 25.53%, while UBS saw a 13.20% rise in its ordinary spot-ETF shares.
• Morgan Stanley's external spot-ETF shares decreased by 3.99%, but it reported 2,570,627 shares of its newly introduced Bitcoin Trust.
• During Q2, the Bitcoin ETF complex experienced approximately $4.89 billion in net outflows, with $2.06 billion occurring in the last five trading sessions of June.
• Both Mubadala and the Abu Dhabi Investment Council maintained their share counts at 14,721,917 and 8,218,712 respectively, despite a decline in market value due to price revaluation.
• UBS's reported long options saw a significant shift, with call underlying equivalents increasing dramatically from 80,000 to 1,950,000 shares, while put equivalents fell by 52.75% to 143,300 shares.

New Insights on Bitcoin and Market Valuations

The Shiller CAPE ratio for the S&P 500 currently sits between 40 and 42, nearing the historic high of approximately 44 observed during the late-1990s dot-com bubble. This indicates that equity valuations are in a rare territory, which Bitcoin holders should monitor closely.

Historically, when the CAPE ratio has remained above 30 for extended periods, the subsequent 10-year real returns for US equities have often been modest or negative. Notably, significant market declines followed the peaks in 1929 and 2000, although the timing of these declines varied.

Bitcoin has shown a correlation with global liquidity, being 87% correlated, while the NASDAQ stands at 97%. This suggests that Bitcoin's price movements are closely tied to the amount of money circulating in the financial system rather than traditional earnings or news events.

The relationship between Bitcoin and market conditions is complex, with Bitcoin acting as both a speculative asset and a potential store of value. Elevated equity valuations and public debt may drive capital towards Bitcoin, especially after initial market corrections.

Overall, while high CAPE levels suggest caution regarding future equity returns, Bitcoin's performance may vary based on factors like interest rates, AI-driven earnings growth, and institutional adoption trends.