- Novogratz says crypto markets now reward usage revenue and clear business value.
- XRP and Cardano face pressure as investors question adoption beyond loyal communities.
- Bitcoin stands apart as money while other tokens face business-style valuation tests.
Galaxy Digital CEO Mike Novogratz warned that community-driven tokens face rising pressure to show real-world utility as crypto markets mature toward the 2026 cycle. He spoke during a discussion with Alex Thorn, Galaxy Digital’s head of firmwide research, on long-term trends shaping digital assets. The conversation covered Bitcoin, tokenization, real-world assets, artificial intelligence, and how investors now assess value across crypto markets.
Novogratz said tokens such as XRP and Cardano rely heavily on loyal communities while facing growing competition from revenue-producing networks. He stated that future cycles may favor assets with measurable business fundamentals rather than sustained enthusiasm alone. Can community strength still support token valuations when investors demand proof of economic output?
Community Strength Faces Economic Scrutiny
Novogratz said crypto markets increasingly separate money-like assets from business-like tokens. He described Bitcoin as already established money with a clear valuation framework. By contrast, he said other tokens function more like businesses that investors value through earnings and output.
“Because the moment you’re not money, and Bitcoin is money, then you’re just a business,” Novogratz said. He added that business valuations tend to run far lower than monetary assets during market repricing phases. This distinction shapes how investors evaluate long-term sustainability.
He questioned whether Ripple and Cardano can maintain relevance as market options expand. “Who became money and who were businesses that are going to now be valued at how much do you make me?” he said. His remarks focused on valuation mechanics rather than protocol design claims.
Usage and Revenue Take Priority
Novogratz said many cryptocurrencies rose over the past decade through speculation or community energy. He argued that the next growth phase depends on practical applications that generate activity and income. Tokens enabling payments or powering active decentralized applications may gain relative strength.
He cited Hyperliquid as an example of a clear economic structure. The exchange burns the majority of profits through token buybacks and destruction. Novogratz compared the model to an equity-like investment with direct value capture.
He contrasted that structure with networks showing limited on-chain usage. He referenced Charles Hoskinson while discussing Cardano’s activity levels. “He’s kept the Cardano community with a blockchain that people don’t really use a lot,” Novogratz said.
Related: XRP Faces Deepest FUD Since October as Price Declines
Regulation and Institutional Pressure Grow
Novogratz said regulatory developments further accelerate the shift toward utility-focused evaluation. Authorities often assess projects based on economic reality rather than technical descriptions. This approach increases pressure on tokens to demonstrate genuine functionality.
The U.S. Securities and Exchange Commission (SEC) continues oversight across cryptocurrency markets. Its actions often examine substance over form when reviewing digital assets. Moreover, international regulatory bodies put emphasis on the protection of consumers and the stability of the financial market in their actions.
By tracking adoption and utility metrics, Galaxy Digital research gains insight into the status of different blockchain networks. The examination of the firm indicates a growing disconnect between projects with genuine usage and those without it. Institutional investors have already started to use the traditional criteria that consider the potential of revenue, the quality of management, and the competitive position.
