Galaxy Digital CEO Mike Novogratz told CNBC that crypto's era of outsized speculative returns is ending as institutions reshape the market toward real-world assets.
Galaxy Digital CEO Mike Novogratz declared that crypto's "age of speculation" may be ending, as institutional capital replaces retail-driven momentum and reshapes the industry toward lower-return, real-world asset applications.
Speaking at the CNBC Digital Finance Forum on February 10, Novogratz outlined a fundamental shift in crypto market dynamics. "The age of speculation will be phased out," he said, explaining that institutional players entering the space have "a different risk tolerance" compared to retail investors who historically chased 10x or 30x returns.
Novogratz predicted that speculative trading will be "transposed or replaced by us using these same crypto rails to bring banking and financial services to the whole world." The result, he said, will be "real world assets with much lower returns."
His comments came as Galaxy Digital reported a Q4 2025 loss of $482 million, worse than Wall Street had anticipated. Despite the disappointing quarter, Galaxy announced a $200 million share repurchase program, signaling confidence in its long-term positioning.
Novogratz's remarks reflect a broader narrative shift in the crypto industry. Since the approval of spot Bitcoin ETFs in 2024, institutional inflows have fundamentally altered market structure. Bitcoin ETFs now hold roughly $147 billion in assets, with projections to reach $180-$220 billion by year-end 2026.
The transition carries significant implications for market behavior. Institutional allocators prioritize risk-adjusted returns over moonshot bets, which could dampen the extreme volatility that defined previous crypto cycles. This aligns with the Kevin Warsh Federal Reserve nomination, which has already tightened financial conditions and reduced appetite for speculative risk assets.
For altcoins and meme tokens, the message is stark. Projects without clear revenue models or institutional appeal may struggle to attract capital in this new environment.
Galaxy's pivot toward tokenized real-world assets and institutional infrastructure will be a bellwether for the industry's direction. Novogratz's Senate confirmation timeline for Warsh, expected in coming weeks, could further define the macro backdrop. Bitcoin currently trades around $71,000, stabilizing after its sharp correction from above $126,000 in October 2025.
Novogratz's declaration marks a symbolic turning point for an industry built on outsized returns. Whether the "age of speculation" is truly over will depend on whether institutions sustain their engagement through the current downturn, or retreat when conditions tighten further.
Wall Street giant Citigroup projects Bitcoin could reach $143,000 within 12 months, citing ETF demand and regulatory tailwinds as key catalysts.
The largest US bank is assessing spot and derivatives trading services as regulatory clarity enables traditional finance to deepen crypto involvement.
BTC stages dramatic 11% recovery after nearly breaching $60K, while market sentiment remains at extreme fear levels.
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