Galaxy Digital CEO Mike Novogratz declared on Tuesday that crypto's "age of speculation" is ending, with institutional players replacing retail traders and real-world asset tokenization compressing future returns across the industry.
His comments came as Bitcoin (BTC) traded around $66,000, down roughly 47% from its October all-time high above $126,000.
Speaking at the CNBC Digital Finance Forum in New York, Novogratz said the shift is structural, not cyclical.
What He Said
Novogratz argued that crypto infrastructure will increasingly serve traditional financial services rather than token speculation.
"It's going to be real-world assets with much lower returns," he said. He contrasted the current downturn with the November 2022 collapse after FTX's bankruptcy, which he called a "breakdown in trust." This time, there is no single trigger.
Instead, Novogratz pointed to the Oct. 10, 2025, leverage flush that erased $19.37 billion in positions and wiped out over 1.6 million traders in 24 hours, according to CCN data.
"When you wipe out a lot of those people, Humpty Dumpty doesn't get put back together right away," he said.
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The Bigger Picture
Bitcoin has fallen more than 21% year to date and hit $60,062 last week - its lowest level in roughly 16 months. U.S. Bitcoin ETFs, which purchased 46,000 BTC during the same period last year, have turned net sellers in 2026, according to CryptoQuant.
Novogratz's own firm has felt the downturn. Galaxy posted a wider-than-expected loss of nearly $500 million for the fourth quarter of 2025, driven by the crypto market crash.
Still, Galaxy is launching a $100 million hedge fund this quarter, allocating up to 30% in cryptocurrency tokens and the rest in financial services equities, according to a January report from the Financial Times. The fund will take both long and short positions.
Why It Matters
Novogratz also expressed optimism about the CLARITY Act, a stalled crypto market structure bill, saying he spoke with Senate Minority Leader Chuck Schumer and that both parties support it.
"We need it for spirit back in the crypto market," he said.
The broader argument - that institutions with lower risk tolerances are displacing speculative retail traders - carries weight in the data. Whether that translates to a permanent change in crypto's return profile or just another bear market narrative remains to be seen.
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