Mike Novogratz, CEO of Galaxy Digital, believes the speculative phase of the cryptocurrency market is nearing its end.
In a recent speech at the CNBC Digital Finance Forum in New York, Novogratz explained that the days of massive, quick returns in cryptocurrencies are over. He mentioned a trend towards institutional investment and that now attention is on more stable and practical uses of digital assets.
Crypto’s Speculative Era May Be Over, Says Novogratz
For years, the crypto market thrived on speculation, with retail investors flocking to cryptocurrencies in hopes of rapid, outsized profits. Novogratz, however, suggests that this speculative phase is taking on a more adult phase based on institutional actors.
He pointed out that such investors are more concerned with stability and usefulness as opposed to the volatility that contributed to the speculative trading in the past.
Novogratz claims that the demand on high-risk, high-reward investments is declining and in its place lies the desire to get more consistent and lower-risk returns. It will be real-world assets at a very low return, he said.
LATEST: 📊 Crypto’s era of high-return speculation may be ending as institutions replace retail investors chasing massive gains, according to Galaxy CEO Mike Novogratz. pic.twitter.com/blOuO5MQLa
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This represents a big movement in the market, and big investors are becoming more interested in tokenized real-world assets (RWAs) like bonds and real estate, which are considered more stable and reliable.
The Impact of Institutional Investors on Crypto
The surge in institutional interest is changing the dynamics of the crypto market. According to Novogratz, this change marks the transformation of the industry where speculative trading gave way to practical uses.
The shift in crypto investing is seen in the waning popularity of unstable financial returns that provide tokenized assets.
Instead of focusing on speculative returns, institutions are seeking long-term stability and a home to deposit capital that will give predictable returns.
Novogratz also indicated that these institutional players are now taking over retail investors, who once dominated the market. He pointed out that the participants of the new crypto markets are not after 100x returns but are more concerned with a consistent, predictable growth model.
FTX Collapse and October Liquidations
The collapse of FTX in 2022 was a pivotal moment for the crypto industry. The huge crash created ripples in the market and caused the experienced losses and a lack of confidence among investors.
As an example, the price of Bitcoin dropped by 78%, declining to $15,700, down to $69,000. Novogratz noted that this marked a big impact on the market, erasing retail traders and market makers, leading to a bearish cycle.
Besides the FTX fallout, Novogratz mentioned another key event, the liquidations in October 2025, where more than 19 billion was wiped out in 24 hours. This large-scale liquidation exercise strained the market and pushed the prices down, indicating a change of market behaviour.
He is of the opinion that a reset is underway in the market and that speculative phase has been replaced by institutional adoption.
Tokenized Assets and the Future of Crypto
Looking ahead, Novogratz sees tokenized real-world assets as the future of the cryptocurrency market. These assets that are secured by fixed or hard assets such as bonds, real estate, and U.S Treasuries are gaining increased appeal by institutional investors.
They provide a more secure option compared to volatile cryptocurrencies, but also use blockchain technology to have safe and transparent transactions.
