Mike Novogratz: Crypto's Investors Have Moved On

Mike Novogratz, founder and CEO of Galaxy Digital, told the story of crypto's rise and fall in a single sentence: "Crypto was a storytelling business." The man who invested $7 million of his own money in Bitcoin at $100 a coin now describes the industry at a crossroads, where the speculative frenzy that drove valuations has largely moved on to AI, sports betting, and zero-day options. Bitcoin is down 50% from its peak, and the energy that once surrounded crypto has shifted elsewhere.

The End of the Gambling Mania

Novogratz is unusually candid about what drove crypto's last bull market. He describes it as "a gambling mania of young people wanting to get wealthy" — they didn't want 12% returns, they wanted 12,000% returns. This was fueled by the invention of the leveraged perpetual future on crypto tokens, which "really created the crypto markets" by allowing people to gamble on stories with leverage. After COVID, when everyone was stuck at home with nothing to do, that dynamic exploded.

But the story has changed. "A lot of the oxygen of that speculative frenzy shifted" to sports betting, same-day options, and Korean stocks. The same young traders who bought Solana are now buying meme stocks. Novogratz notes that his hedge fund contacts who used to call him daily about crypto now call once every two weeks. "It's just not as exciting of a space," he says flatly.