Bitcoin billionaire Mike Novogratz says crypto prices will stay under pressure as bond yields shoot higher

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Billionaire investor Mike Novogratz has said that crypto prices are likely to stay under pressure as government bond yields rise rapidly.

«As long as rates go higher we will see pressure on Nasdaq and crypto,» Novogratz, founder of investment company Galaxy Digital, tweeted Tuesday.

Bond yields have risen sharply this year, with investors anticipating a series of interest-rate increases from the Federal Reserve as the US economy deals with the hottest inflation in 39 years.

The jump in yields has whacked technology stocks and the tech-heavy Nasdaq 100 index, as well as cryptocurrencies such as bitcoin, ethereum and binance coin.

Analysts have said that the more speculative parts of the market look less attractive when returns on government bonds, which are risk-free, are higher.

Novogratz said that the yield on the key 10-year US Treasury note could soon break past 2%, a symbolic level that could trigger further volatility in markets.

The yield rose sharply Tuesday and climbed further Wednesday to stand at 1.89%, its highest level since the start of 2020.

Many investors are increasingly worried about the outlook for crypto in 2022.

Bitcoin and other tokens soared in 2021, in no small part because of the easy-money policies of global central banks. But those policies are about to come to an end as developed economies grapple with soaring inflation.

Read more: The CEO of a $10 billion crypto-finance firm breaks down the 3 key trends on his radar in 2022 — and shares his outlooks for bitcoin, ethereum, and 3 other altcoins

Crypto prices have fallen sharply over the last month. Bitcoin was roughly flat at $41,941 on the Bitstamp exchange on Wednesday, far below November's record high of more than $68,000.