At the recent CNBC Digital Finance Forum held in New York City, Mike Novogratz, founder and CEO of Galaxy, attributed the latest decline in bitcoin and the broader cryptocurrency market to an industry-wide evolution rather than a specific catalytic event. He noted that unlike the dramatic 22% drop in November 2022 following the collapse of FTX, which was marked by a 'breakdown in trust,' the current situation does not involve a 'smoking gun.'
Novogratz expressed that many anticipated a bull run in digital assets expected to commence in 2026, particularly given a crypto-friendly Trump administration and potential passage of a cryptocurrency market structure bill. Contrary to these expectations, bitcoin has plunged over 21% this year, hitting a low of $60,062.00 last week, a decrease of nearly 50% from its peak in October 2025.
Novogratz highlighted the historical volatility of cryptocurrencies, often influenced by overarching macroeconomic factors or specific 'crypto winters.' He recalled the October 2025 episode when over 1.6 million traders faced a combined $19.37 billion loss in leveraged positions overnight, leading to significant price pressure as many retail investors and market makers were wiped out.
According to Novogratz, 'crypto is all about narratives and stories.' He explained how the current market wipeout disrupts these narratives, making recovery akin to reassembling 'Humpty Dumpty.' Despite this, he foresees a transformative change emerging from the downturn, marking the end of the 'age of speculation' as institutions with different risk appetites enter the scene.
Novogratz remarked that retail investors are drawn to crypto for high returns rather than modest annualized gains. He anticipates a shift towards using 'crypto rails' to offer global banking and financial services with real-world assets offering lower returns.
Additionally, Novogratz discussed tokenized stocks as assets that will yield varied return profiles. When questioned about the potential impact of the CLARITY Act, Novogratz was optimistic, referencing his recent conversation with Senate Minority Leader Chuck Schumer, who assured that the bill would pass. He emphasized the necessity of the crypto market structure bill to revive the 'spirit' within the crypto market.