Crypto’s ‘age of speculation’ is over, says Galaxy CEO Mike Novogratz

Throughout its history, bitcoin and other cryptocurrencies have been subject to significant price swings, whether resulting from larger macro factors affecting entire asset classes or “crypto winters” tied to industry concerns.

However, due to the crypto-friendly Trump administration and expectations for the passage of the cryptocurrency market structure bill, many viewers expected a new bull run in digital assets to begin in 2026. However, the situation was exactly the opposite. Bitcoin is down more than 21% so far this year, falling to $60,062.00 last week. This is the lowest level in nearly 16 months. This marked a decline of nearly 50% from the record set in October 2025.

What is the reason for this latest decline? Galaxy founder and CEO Mike Novogratz said at a single event: CNBC Digital Finance Forum It’s a reflection of a larger industry shift, he said Tuesday in New York City. Speaking to CNBC’s MacKenzie Sigalos at the event, Novogratz said there was a “collapse of trust” when Bitcoin fell 22% in less than a day in November 2022 following the FTX collapse. “There’s no smoking gun this time,” he said. “You look around and say, what happened?”

Novogratz noted the wipeout, which occurred in October 2025, as a significant event, when more than 1.6 million investors suffered leveraged position wipeouts totaling $19.37 billion in a 24-hour period, a situation that “eliminated many retailers and market makers” and put immense pressure on prices.

“Crypto is all about narratives, it’s about stories,” he said. “These stories take a while to build, and you pull people in… so when you destroy a lot of these people, Humpty Dumpty doesn’t come back together right away,” he said.

But Novogratz also thinks he expects something more permanent to emerge from the current crisis, saying that the last era of crypto investing, the “age of speculation,” will phase out as the crypto industry introduces “institutions where people have a different tolerance for risk.”

“Retailers aren’t getting into crypto because they want to make 11% annually,” he said. “They come in because they want to win 30 to one, eight to one, 10 to one.”

Novogratz says some traders will always speculate, but overall “it will be transferred or replaced by us using the same rails, these crypto rails, to bring banking.” [and] financial services to the whole world. And so there will be real-world assets with much lower returns.”

He also noted that tokenized stocks are assets that will have a “different return profile.”

Sigalos asked Novogratz whether the eventual passage of the CLARITY Act could be a catalyst for the industry; The pause in the crypto market structure bill’s momentum on Capitol Hill was at least a short-term headwind. He is confident that the crypto market structure bill will eventually become law.

“I spoke [Senate Minority Leader] “Chuck Schumer said two nights ago, ‘We’re going to pass the damn CLARITY Act.’ Democrats want to pass it, Republicans want it too,” Novogratz said.

Novogratz said the crypto industry needs the bill “for many reasons,” but most importantly, “We need it for the spirit of returning to the crypto market.”