Julie Hyman catches up with Galaxy Digital (GLXY.TO) CEO and founder Michael Novogratz at the Future Proof Festival in Huntington Beach, California, to discuss crypto exchange-traded funds (ETFs) options and the impacts of the upcoming presidential election on the crypto market.

State Street and Galaxy Digital recently introduced three crypto ETFs: the SPDR Galaxy Digital Asset Ecosystem (DECO), SPDR Galaxy Hedged Digital Asset Ecosystem (HECO), and SPDR Galaxy Transformative Tech Accelerators (TEKX).

Novogratz says the ETFs are “off to a great performance in one week... Up until now, crypto has been just a long play, and now with as many equities as there are around the space, you're able to go long and short in these ETFs, use options to hedge, and not short in the ETFs, but long or short your index use options to hedge, and so it really is an alpha product.” The CEO expects the ETFs are “going to bring a lot of new participants into the into the market.”

Ahead of the presidential election, Novogratz tells Yahoo Finance he expects bitcoin (BTC-USD) to go up in the long term, regardless of who is in the White House. “If you step back, Bitcoin is going higher because neither party wants to deal with the deficit, and I don't know who's going to be worse” for the deficit.

The CEO says the biggest risk to bitcoin is an administration that tackles the national deficit. “If we have an administration that takes debt to GDP (Gross Domestic Product) from 130% back to 80%, or at least heading in that direction, that says we need to raise taxes and cut spending, that we need to make our people more efficient… If you have that miracle… bitcoin would go down, not up.”

“Bitcoin goes up in the US and around the world because governments can't keep their pants on. They just can't stop spending money, and that's almost endemic to what governments do,” he adds.

Novogratz outlines his view that government spending sends hard assets like gold (GC=F) higher: “I do think bitcoin is such a better version of gold than gold, and it's a generation of young people live in a digital world. They live on screens 15 hours a day, some kids are on screens and so it's a better version of gold.”

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This post was written by Naomi Buchanan.