Mike Novogratz, a well-known cryptocurrency proponent known as the "boss of the currency circle", has abandoned his prediction that Bitcoin will climb to as much as $500000 within five years, citing aggressive interest rate hikes by the Fed, Zhitong Financial APP has learned. "it will happen (bitcoin goes up to $500000 per piece), but it won't happen in five years," Novogratz said in an interview with the media on Thursday. " The biggest change, he said, was a sharp tightening of liquidity by the Fed, led by Chairman Powell and others.

Novograz, chief executive of Galaxy Digital, an investment agency specialising in cryptocurrencies, said that like most risky assets, Bitcoin has fallen sharply this year as the Fed is raising interest rates to curb high inflation. According to statistics, Bitcoin, the world's largest cryptocurrency by market capitalization, has fallen by more than 60% this year to about $17000 per piece. The negative impact of the collapse of the cryptocurrency exchange FTX last month accelerated the pessimism in the cryptocurrency market.

"the demise of FTX and the rapid collapse of hedge fund Three Arrows Capital and cryptocurrency lenders Celsius Network and BlockFi will certainly damage overall confidence in cryptocurrencies, but I think it will pass, too." Novograz said in an interview.

Mr Novogratz said Galaxy Digital was considering "some small acquisitions" to help cheap cryptocurrency assets that could be in trouble. As a precaution, Galaxy Digital also reduced its allocation to cryptocurrency exchanges and began to closely monitor the exchange's reserve levels, he said. Earlier, there were media reports that some of Galaxy's assets were trapped on the FTX exchange, which is on the verge of bankruptcy.