SKN | Galaxy’s Steve Kurz Sees Structural Convergence Powering Crypto’s Long-Term Trajectory

A growing convergence between traditional finance, digital assets, and regulatory frameworks is laying the foundation for crypto’s next structural phase, according to Steve Kurz, Global Head of Asset Management at Galaxy. His remarks come as institutional participation in digital assets remains elevated, even amid macro-driven volatility and periodic price corrections.

Market Context: Volatility Masks Structural Growth

Digital asset markets have experienced cyclical swings over the past year, with Bitcoin and Ether oscillating within broad ranges influenced by inflation data, interest rate expectations, and liquidity conditions. Despite periodic drawdowns of 10–20% within months, institutional flows into spot ETFs and custody platforms have remained resilient, suggesting underlying capital commitment.

Galaxy itself has reported continued growth in assets under management tied to digital strategies, reflecting sustained demand from family offices, hedge funds, and pension-linked allocators. Trading volumes across major exchanges have moderated compared with peak speculative cycles, yet institutional-grade derivatives and custody metrics indicate steady engagement rather than retrenchment.

Regulatory Alignment: From Friction to Framework

Kurz highlighted improving regulatory clarity as a core component of the convergence thesis. In recent years, clearer stablecoin standards, ETF approvals, and defined custody frameworks have reduced barriers for compliance-focused investors. Regulatory certainty tends to catalyze infrastructure buildout rather than immediate price appreciation, enabling banks, asset managers, and fintech platforms to expand digital asset offerings within structured oversight.

As digital assets increasingly intersect with established financial rails, the distinction between “crypto-native” and “traditional” finance continues to narrow. Institutional-grade reporting, risk management protocols, and audit transparency have strengthened credibility among conservative allocators.

Technology Integration and Capital Markets Evolution

The convergence narrative extends beyond regulation to technological interoperability. Blockchain-based settlement systems, tokenized assets, and on-chain collateral management are gradually integrating with conventional capital markets. Institutional experiments with tokenized treasuries and real-world assets illustrate how digital infrastructure can complement rather than displace legacy systems.

On-chain data shows rising participation from wallets associated with institutional custodians, even during periods of muted price momentum. This pattern suggests strategic positioning tied to long-term integration rather than short-term speculation. As decentralized finance protocols mature and layer-2 scalability improves, the capacity for enterprise adoption expands correspondingly.

Investor Sentiment: Strategic Allocation Over Tactical Trading

Market psychology has evolved from retail-driven enthusiasm toward measured capital deployment by professional allocators. Options positioning reflects balanced hedging activity, while ETF inflows demonstrate consistent demand even during volatility spikes. This behavior indicates that institutional investors are viewing crypto as a component of diversified portfolios rather than a purely opportunistic trade.

Looking ahead, the pace of convergence will depend on sustained regulatory cooperation, technological scalability, and macro stability. For sophisticated crypto investors, the significance lies not in short-term price targets but in the structural integration of digital assets within global capital markets. If convergence continues to accelerate, crypto’s role may increasingly resemble a foundational infrastructure layer—embedded within, rather than adjacent to, traditional finance.