(Bloomberg) -- Crypto advocate Mike Novogratz dropped his forecast for Bitcoin to climb to $500,000 in five years, citing the Federal Reserve’s interest rate increases. 

It will, but “not in five years,” Novogratz said Thursday during an interview on Bloomberg Television. The biggest change that happened is that Fed Chair Jerome Powell found “his central banking superpowers.”

Like most risk assets, Bitcoin has slumped this year because the Fed is raising rates to contain inflation, Novogratz, the chief executive of Galaxy Digital, said. 

Bitcoin has tumbled more than 60% this year, dropping to around $17,000. Fallout from the bankruptcy of the FTX exchange last month helped accelerate losses across the cryptocurrency market.    

The demise of FTX, along with the collapse of hedge fund Three Arrows Capital and lenders Celsius Network and BlockFi are “certainly hurting the overall confidence in crypto, but that too shall pass,” he said.

Galaxy Digital is looking at potentially acquiring distressed and cheap crypto assets via “some small acquisitions,” Novogratz said. Galaxy has also reduced its balances on crypto exchanges as a precaution and began looking closely at exchanges’ reserves, he said, after having some of its assets trapped on the FTX exchange.   

--With assistance from Romaine Bostick and Scarlet Fu.

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