SKN | Galaxy’s Novogratz Says Crypto’s ‘Age of Speculation’ May Be Fading as Institutions Take the Lead

Key Points

• Mike Novogratz says crypto’s era of extreme retail-driven gains may be ending as institutions take a larger role.

• He expects tokenized real-world assets to drive the next growth phase with steadier, lower returns.

• Long-term bitcoin holders may benefit from a maturing market structure despite reduced speculative upside.

The era of outsized, retail-driven gains in crypto may be giving way to a more measured phase dominated by institutional capital, according to Mike Novogratz, CEO of Galaxy Digital.

“Retail people don’t get into crypto because they want to make 11% annualized,” Novogratz said. “They get in because they want to make 30-to-one, eight-to-one, 10-to-one.” As more risk-conscious institutional players enter the market, he suggested, that appetite for extreme upside may be diluted.

From Retail Frenzy to Institutional Discipline

Novogratz framed the shift as a structural evolution rather than a temporary lull. After the 2022 collapse of FTX  which saw bitcoin plunge roughly 78% from $69,000 to near $15,700  trust in the ecosystem eroded sharply. That episode, he said, represented a “breakdown in trust” that reset both valuations and expectations.

More recently, he pointed to the Oct. 10 leverage flush  a rapid unwind that wiped out heavily leveraged retail traders and market makers  as another inflection point. Unlike prior crashes triggered by clear catalysts, Novogratz noted the latest correction lacked a singular “smoking gun,” underscoring how fragile narrative-driven markets can be.

“Crypto is all about narratives,” he said. “Those stories take a while to build… when you wipe out a lot of those people, Humpty Dumpty doesn’t get put back together right away.”

The implication is that speculative fervor, once disrupted, does not instantly return  particularly as the investor base shifts toward institutions prioritizing risk management over explosive upside.

Tokenized Real-World Assets as the Next Chapter

Looking ahead, Novogratz expects the center of gravity to move from meme-driven speculation to tokenized real-world assets (RWAs), which could offer steadier, lower-yield opportunities on blockchain rails. Rather than chasing exponential returns, capital may increasingly flow toward digitized bonds, credit products, and other traditional instruments brought on-chain.

That thesis aligns with comments from Sergey Nazarov, co-founder of Chainlink Labs, who said tokenized RWAs could ultimately surpass cryptocurrencies in total value across the industry. If that shift materializes, crypto’s identity would transform from speculative asset class to financial infrastructure layer.

A Changing Bitcoin Holder Base

The composition of bitcoin holders is also evolving. David Marcus, CEO of Lightspark and former PayPal executive, told Bloomberg that a new cohort of longer-term investors is emerging. While leverage-driven traders have been flushed out, committed holders who view bitcoin as a macro hedge remain.

Marcus suggested that those who see bitcoin as protection against systemic or monetary risk will likely withstand the current turbulence, even if speculative upside becomes less pronounced.

Lower Highs, Higher Stability?

The broader takeaway from Novogratz’s remarks is not that crypto’s growth story is over, but that its character may be changing. As institutional capital deepens liquidity and regulatory clarity advances, volatility could compress  potentially limiting parabolic rallies while reducing catastrophic drawdowns.

For retail traders seeking rapid multiples, that shift may feel like the end of an era. For institutions and infrastructure builders, it could represent the beginning of a more durable market phase.

If crypto’s “age of speculation” is indeed fading, the industry’s next chapter may hinge less on 10x narratives and more on incremental integration into global finance  a transition that could prove less explosive, but ultimately more enduring.