Galaxy Digital CEO Mike Novogratz stated that the days of abnormally high returns in cryptocurrencies may be nearing their end. He noted that retail investors seeking quick profits are gradually being replaced by more conservative institutional players, signaling a maturation in the crypto market. Novogratz spoke at the CNBC Digital Finance Forum in New York on Tuesday, explaining that this shift reflects the industry’s evolution. ”Retail investors aren't buying cryptocurrency to get 11% a year,” he said. ”They're entering the market because they're looking for serious returns: 30x, 8x, or 10x their investment.” The Aftermath of the FTX Crash and October Liquidations Novogratz recalled the FTX crash in 2022, which triggered a major bear market. Bitcoin plummeted 78% from $69,000 to $15,700 , leading to what he described as a ”breach of trust” in the market. He also highlighted the October 10 liquidations, which wiped out many retail traders and market makers, increasing selling pressure despite the absence of a major catalyst. ”There's no smoking gun this time,” Novogratz said. ”You look around and think, 'What happened?'” Tokenized Assets and the Shift From Speculation Looking forward, Novogratz predicts a shift from high-yield speculation to more practical uses of cryptocurrency, such as tokenized real-world assets offering more stable returns. While some traders will continue speculating, he expects cryptocurrency rails to increasingly support banking and financial services globally. Chainlink co-founder Sergey Nazarov expressed a similar opinion, stating that tokenized real-world assets ”will surpass cryptocurrencies in total value, fundamentally changing the industry.” Changing Bitcoin Holders Lightspark co-founder and CEO David Marcus, a former PayPal executive, observed a change in Bitcoin holders. ”It's simply a change in who holds Bitcoin, moving from long-term direct holders to broader access built into our financial system and markets,” he said. Marcus added that the October liquidations and shifting holder composition have altered market dynamics. However, those who continue to view Bitcoin as a hedge against broader market uncertainty are expected to remain resilient. Market Patterns and Institutional Influence Historically, predictions about the ”end of speculation” are familiar, reminiscent of warnings during the dot-com bubble and the 2008 financial crisis. Institutionalization may paradoxically increase cryptocurrency’s correlation with traditional assets, challenging its role as an alternative financial system. History also suggests that periods of market stabilization often precede waves of innovation, hinting that the next crypto catalyst may emerge from new financial products rather than existing tokenized assets.
