Michael Novogratz Signals Crypto Treasury Craze Likely Past Its Peak

Michael Novogratz, founder and CEO of Galaxy Digital, signaled during the firm’s second-quarter earnings call that the surge in crypto treasury companies has likely reached a peak. He noted that while the creation of firms holding cryptocurrencies in their corporate treasuries has been a major trend, the market is now shifting focus from new entrants to which existing companies can grow and succeed in the next phase [1]. Novogratz described this as a natural evolution of the market, where increased competition and a more crowded landscape make it harder for new firms to stand out.

The crypto treasury model has gained significant traction, particularly with more favorable regulatory conditions in the U.S. These companies raise capital in public markets and allocate a portion of their reserves into digital assets such as Bitcoin and Ethereum. Prominent examples include Strategy (formerly MicroStrategy), GameStop, Trump Media & Technology Group, SharpLink Gaming, and Bit Digital. Ethereum has already attracted two major corporate treasury holders: BitMine, backed by Tom Lee, and SharpLink, co-founded by Joe Lubin. Novogratz expects both to continue expanding but warned that new entrants may find it increasingly difficult to attract attention or investment [1].

Galaxy Digital, which oversees crypto assets for over 20 treasury-focused firms, is positioned to benefit from this trend. The company reported managing approximately $2 billion in assets across these partnerships and described the income as a “recurring revenue stream” that is expected to continue growing. In May, Galaxy shifted its public listing from the Toronto Stock Exchange to the Nasdaq Global Select Market under the ticker symbol GLXY, a move aimed at strengthening its U.S. presence [1].

The firm is also exploring the tokenization of its publicly traded shares as part of its broader strategy to expand into blockchain-based financial infrastructure. Founded in 2018, Galaxy Digital offers services such as asset management, trading, investment banking, and infrastructure solutions, primarily targeting institutional clients looking to gain exposure to digital assets [1].

Novogratz’s remarks indicate a shift in the crypto market’s focus. The initial wave of new crypto treasury companies appears to be subsiding, and the next phase will likely be defined by consolidation and differentiation. The ability of existing firms to scale operations and demonstrate sustainable value will be critical in determining which companies emerge as market leaders [1].

Source: [1] Michael Novogratz Signals Crypto Treasury Craze Likely Past Its Peak – Cryptonews (https://cryptonews.com/news/michael-novogratz-signals-crypto-treasury-craze-likely-past-peak/)