Bitcoin and the broader cryptocurrency market may be entering a new phase, according to Galaxy Digital CEO Mike Novogratz (10/02). Speaking at the CNBC Digital Finance Forum, he said the “age of speculation,” when investors expected unusually high returns, could be ending.

“It’s going to be real world assets with much lower returns,” Novogratz told CNBC’s MacKenzie Sigalos on Tuesday.

Bitcoin and Cryptocurrency Prices Show Steep Declines in 2026

Bitcoin has dropped more than 21% so far this year and nearly 50% from its October 2025 peak, trading recently at $60,062.00, its lowest level in roughly 16 months. Many had expected a post-election crypto bull run with a crypto-friendly Trump administration and the potential passage of a market structure bill.

Novogratz said the latest decline reflects a broader industry shift rather than a single event. “This time, there’s no smoking gun. You look around like, what happened?” he said. He highlighted the October 2025 wipeout, when over 1.6 million traders lost a combined $19.37 billion in leveraged positions within 24 hours, as a key factor that “wiped out a lot of retail and market makers” and pressured prices.

Institutional Investors and Changing Risk Tolerance Reshape Crypto

Novogratz explained that cryptocurrency markets are driven by narratives that take time to develop. “Crypto is all about narratives, it’s about stories… so when you wipe out a lot of those people, Humpty Dumpty doesn’t get put back together right away,” he said.

He added that retail investors typically seek very high returns, not moderate gains: “Retail people don’t get into crypto because they want to make 11% annualized. They get in because they want to make 30 to one, eight to one, 10 to one.” He expects speculation to gradually give way to institutions with different risk tolerances, using crypto infrastructure to provide global banking and financial services.

Regulatory Clarity Could Support the Next Phase of Crypto Growth

Novogratz also addressed the potential impact of the CLARITY Act, noting bipartisan support for the bill. “I talked to [Senate Minority Leader] Chuck Schumer two nights ago and he said ‘We’re going to pass the goddamn CLARITY Act. The Democrats want to pass the act, and the Republicans want to,’” he said.

He emphasized that the industry needs the bill not only for regulation but also to restore confidence and “spirit back in the crypto market.”

Tokenized Assets and Real-World Returns on the Horizon

Looking forward, Novogratz said crypto will increasingly focus on tokenized stocks and real-world assets with lower, more predictable returns, rather than high-risk speculation. This marks a significant shift in how digital assets may be used in global financial markets.

PHOTO: UNSPLASH

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