Michael Novogratz, founder and chief executive of Galaxy Digital, believes the surge in companies holding cryptocurrencies on their balance sheets has likely reached its peak. Novogratz made the comments during Galaxy Digital’s second-quarter earnings call. He stated, “We’ve probably gone through peak treasury company issuance,” adding that the focus is now on identifying which of the existing companies will become market leaders. Galaxy Digital is a financial services and investment management firm in the digital asset, cryptocurrency, and blockchain technology industry. The company provides institutions and direct clients with a full suite of financial solutions spanning the digital asset ecosystem.
Crypto treasury companies have become more common recently, raising capital in public markets and investing corporate funds in tokens, aided by a more favourable regulatory environment in the US. Early models largely mirrored Michael Saylor’s Strategy, focusing on Bitcoin. More recent companies have diversified, including Ether, Solana, and other cryptocurrencies.
Novogratz highlighted Ethereum, the second-largest cryptocurrency, as having two significant treasury holders: Tom Lee’s BitMine and Joe Lubin’s SharpLink. He anticipates that these entities will continue to expand. However, he cautioned that new companies entering the crypto treasury market may face challenges in gaining traction.
Galaxy Digital partners with over 20 crypto treasury investment firms, earning management fees for managing their crypto holdings. These partnerships have contributed approximately $US2 billion ($3.1 billion) in assets to Galaxy’s platform, resulting in what Novogratz described as “recurring income that will go on and on.”
