Remember when everyone was throwing money at meme coins hoping to get rich quick? Galaxy Digital's CEO Mike Novogratz thinks those days are fading as institutions with a more risk-averse mindset take over the crypto space. Get ready for a world of "real world assets with much lower returns," he says.
Bitcoin's Bumpy Ride
Bitcoin and other cryptocurrencies have always been known for their wild price swings. Macroeconomic factors and internal industry issues have contributed to significant volatility. Despite hopes for a bull run fueled by a potentially crypto-friendly Trump administration and a new market structure bill, Bitcoin has struggled this year. It's down more than 21% and briefly dipped to $60,062, nearly 50% below its record high from October 2025.The End of Easy Money?
According to Galaxy founder and CEO Mike Novogratz, this isn't just a blip. Speaking at the CNBC Digital Finance Forum, Novogratz explained that unlike the FTX collapse in 2022, there's no single "smoking gun" to blame this time. Instead, he sees a fundamental shift in the industry. He pointed to the October 2025 wipeout, where over 1.6 million traders lost a combined $19.37 billion in leveraged positions, as a key event. "Crypto is all about narratives, it's about stories," he said. "Those stories take a while to build and you're pulling people in … so when you wipe out a lot of those people, Humpty Dumpty doesn't get put back together right away."Institutions Take the Wheel
Novogratz believes the recent downturn signals the end of the "age of speculation." He expects institutions with different risk tolerances to dominate the crypto landscape. "Retail people don't get into crypto because they want to make 11% annualized," he said. "They get in because they want to make 30 to one, eight to one, 10 to one." Instead, Novogratz envisions a future where "crypto rails" are used to bring banking and financial services to the world, focusing on real-world assets with lower returns, like tokenized stocks.Regulatory Relief on the Horizon?
When asked if the passage of the CLARITY Act, a cryptocurrency market structure bill, could boost the industry, Novogratz expressed confidence. He believes the bill is essential for restoring "spirit back in the crypto market." "'We're going to pass the goddamn CLARITY Act,'" Novogratz said, quoting [Senate Majority Leader Chuck Schumer](https://en.wikipedia.org/wiki/Chuck_Schumer). "The Democrats want to pass the act, and the Republicans want to."The Bigger Picture
- The crypto market may be transitioning from high-risk speculation to more stable, utility-driven investments.
- Institutional investors are expected to play a bigger role, focusing on real-world assets and lower returns.
- Regulatory clarity, such as the passage of the CLARITY Act, could provide a much-needed boost to the market.
- This shift could lead to a more mature and sustainable crypto ecosystem, but with less potential for overnight riches.
- "People are looking for one thing to blame for the current retracement in bitcoin. But there is not any one thing to blame," said [Matt Hougan](https://www.bitwiseinvestments.com/people/matt-hougan), CIO at [Bitwise Asset Management](https://www.bitwiseinvestments.com/).
Source: www.cnbc.com
Disclosure: This article is for informational purposes only.
