Mike Novogratz sees the bond sell-off helping to push bitcoin's price higher as the cryptocurrency sets sights on $50,000

• Mike Novogratz told CNBC on Tuesday that bitcoin's recovery has been aided by the selloff in bonds.
• Bitcoin is approaching $50,000, which was the top end of Novogratz's price prediction for 2022.

Bitcoin is pushing back toward $50,000 and billionaire investor Mike Novogratz said Tuesday on CNBC its price recovery so far in 2022 appears to be aided by bond investors putting money to work in cryptocurrencies.

Bitcoin on Tuesday traded above $48,000, further solidifying the erasure of its year-to-date loss. The digital currency was on the path toward $50,000, a price it hasn't seen since December 2021.

"Early in the year, I thought we would be [at] $30,000, $50,000, but I also thought stocks would be a little softer than they are," Novogratz told CNBC during a television interview. "Maybe what I got wrong was with all this selling in fixed income – that money's got to go somewhere."

The steep selloff in US government debt has put that market on course for its worst returns since 1949, Bank of America said last week. Investors have been ditching bonds in anticipation of the Federal Reserve's aggressive cycle of raising interest rates to combat high inflation. Meanwhile, the S&P 500, which was pushed into a correction earlier this year, has clawed back losses, trimming its decline to less than 4%.

Novogratz, who founded crypto merchant bank Galaxy Digital, said the broadening adoption of cryptocurrencies has also been a factor in bitcoin's favor.

"Janet Yellen pivoted and was much more friendly to crypto … than she'd ever been," said Novogratz, referring to Treasury Secretary Yellen's interview on CNBC last week. Yellen said she recognizes the benefits of crypto, including innovation in the payment system.

He also said he believes the growing popularity of cryptocurrencies will soften the stance by some Democrats in Washington toward digital currencies, including Senator Elizabeth Warren of Massachusetts who has been a leading crypto critic.

"But mostly we're just seeing adoption … countries, you know, participating, sovereign wealth funds getting involved, pension funds getting involved," said Novogratz. "We're still early in this adoption cycle. I'm much more optimistic than I was even six, seven weeks ago."