TL;DR
- Novogratz said the boom in crypto treasury companies has already peaked, and the current challenge is building sustainable models.
- Galaxy works with over 20 crypto-focused firms and has added $2 billion in managed assets.
- It posted $30.7 million in Q2 earnings, but revenue missed expectations and its stock dropped 7%.
Michael Novogratz, CEO of Galaxy Digital, believes the rapid expansion phase for companies holding cryptocurrencies in their treasuries has reached its limit.
During the company’s quarterly earnings call, he explained that the focus now shifts to identifying which of the existing players can scale sustainably. Over the past few months, these firms have surged in number, driven by a more favorable regulatory environment in the U.S. Early entrants mostly followed the Strategy model, with Bitcoin as the dominant asset. More recent companies, however, have begun including cryptocurrencies like Ethereum and Solana on their balance sheets.
A Shift Toward New Cryptocurrencies
Galaxy currently works with more than 20 investment firms specializing in crypto, offering digital asset management services. That business line has provided the company with recurring income and added around $2 billion in assets to its platform. Novogratz pointed out that firms such as BitMine and SharpLink already hold sizable positions in Ethereum and may continue to grow. At the same time, he warned that new entrants will likely struggle to stand out and attract interest in an increasingly competitive landscape.
In the second quarter of 2025, Galaxy Digital reported a net income of $30.7 million. The figure marked a strong turnaround from the losses posted during the same period last year. However, earnings per share came in below analysts’ expectations, partly due to weaker spot trading volumes. The company’s stock was down about 7% on Tuesday in New York.
‘Project Crypto’: The U.S. Role in Future Financial Markets
Novogratz also commented on the role that crypto treasury firms and exchange-traded funds could play as access points for traditional hedge funds that prefer not to hold tokens directly. In the long term, he expects market structures to shift toward blockchain-based frameworks.
Still, he noted there is no clear answer yet as to how liquidity will function in tokenized markets. In that context, he mentioned “Project Crypto,” an initiative launched by SEC Chairman Paul Atkins that aims to explore how U.S. markets could transition to this new financial architecture
