The turmoil in the banking sector will hit the economy and continue to drag down the stock market, investor Mike Novogratz said Wednesday. In order to rebuild capital, banks are going to have to lend less, he said. “You’re going to see a credit crunch happening in the United States and that’s starting to get priced into the market in a dramatic way,” the CEO of Galaxy Digital said in an interview with CNBC’s ” Squawk Box .” In the latest crisis to hit the banking sector, Credit Suisse ‘s largest investor, Saudi National Bank, said it could not provide any more funding , according to Reuters. The news follows the Swiss lender’s acknowledgement on Tuesday that it found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022. Credit Suisse dragged down the European Bank sector, while its U.S.-listed shares sank. CS 1D mountain CS drops The decline added to pressure on U.S. stocks and the banking sector, which is already grappling with the collapse of Silicon Valley Bank and crypto-focused Signature Bank. “There is contagion,” Novogratz said. He thinks people “learned their lessons” and will look to shift towards larger institutions unless the government does more to guarantee deposits. On Sunday, banking regulators said it would backstop depositors with money at Silicon Valley Bank. “Congress and the Fed [are] going to have to do something more dramatic on deposits or we are going to see a constant pressure on these regional banks and the whole system,” he said. In this environment, he would look for assets that go up with the steepening of the yield curve. “You want to be long gold and silver. You want to have yield curve steepeners,” he said. Gold prices have moved higher , with the precious metal hitting a one-month high Monday as the banking turmoil drove bets the Fed may even pause its rate hikes. Bitcoin is also a beneficiary, Novogratz thinks. “If there was ever a time to be in Bitcoin and crypto, this is why it was created in that governments print too much money whenever the pain gets too great — and we’re seeing that,” he said. Bitcoin has also rallied this week, hitting levels on Tuesday not seen since last summer.