The recent decline in the cryptocurrency market is influenced by a larger industry transformation rather than an isolated incident, according to Galaxy founder and CEO Mike Novogratz. Speaking at the CNBC Digital Finance Forum in New York City, Novogratz remarked that the lack of a 'smoking gun' differentiates this downturn from the dramatic trust erosion following the FTX collapse in November 2022, when Bitcoin plummeted by 22% in a single day.
Despite anticipation for a crypto surge in light of a supportive Trump administration and potential cryptocurrency legislation, Bitcoin has experienced more than a 21% decline this year, reaching $60,062.00—its lowest point in about 16 months. This figure represents nearly a 50% drop from its peak in October 2025. Historically, Bitcoin and other digital currencies have been subject to significant price volatility due to macroeconomic factors and industry-specific concerns.
Reflecting on past fluctuations, such as the October 2025 wipeout that saw massive leveraged position losses, Novogratz highlighted the challenge of restoring market confidence and stability. He emphasized the impact of narratives in crypto investing, noting that the erasure of retail traders and market makers creates a slow recovery process, akin to rebuilding 'Humpty Dumpty.'
Looking ahead, Novogratz foresees a gradual fading of 'the age of speculation,' as institutional investors, with different risk profiles, increasingly enter the crypto space. In contrast to retail investors driven by high returns, he suggests that future growth will come from utilizing cryptocurrency technology for global banking and financial services, with an emphasis on tokenized stocks and real-world assets offering stable, albeit lower, returns.
Sigalos queried Novogratz on the potential impact of the eventual CLARITY Act passage. He remains optimistic, stating, 'I talked to [Senate Minority Leader] Chuck Schumer two nights ago and he said 'We're going to pass the goddamn CLARITY Act.'' Both political parties are keen on its enactment, which Novogratz believes is crucial for revitalizing the crypto market's spirit.