In the dynamic and often tumultuous world of cryptocurrency, understanding the underlying currents is paramount. Steve Kurz, Global Head of Asset Management and Co-Head of Digital Assets at Galaxy Digital, offers a compelling perspective, suggesting that recent market turbulence is not a sign of systemic failure, but rather a healthy deleveraging within an increasingly mature ecosystem. His vision, articulated in Galaxy’s 2026 investment outlook, “The Great Convergence,” posits a future where crypto transcends its role as a mere asset class to become an indispensable component of global financial infrastructure.
Navigating the Current Crypto Climate: A Healthier Pullback
The crypto market has experienced significant pullbacks, leaving many scratching their heads given the concurrent positive fundamental developments. Kurz attributes this price weakness primarily to a liquidity and leverage cycle, distinct from the structural fragilities exposed during the 2022 downturn. Unlike the previous cycle, where liquidations revealed deep-seated architectural flaws, today’s market boasts more sophisticated instruments and robust risk-management frameworks. This, Kurz argues, makes the recent sell-off a “regular wave of deleveraging” – a necessary cleansing rather than a systemic breakdown.
Beyond V-Shaped Recoveries: A Gradual Ascent
While the immediate future might not see a dramatic V-shaped recovery, Kurz anticipates a period of consolidation and range-bound trading. He suggests that the market has likely absorbed the brunt of forced selling, paving the way for gradual gains as institutional capital continues to deepen its engagement. His base case points towards several months of stabilization before a firmer upward trajectory emerges in the latter half of the year, driven by tangible increases in on-chain activity and adoption.
The ‘Great Convergence’: Crypto as Core Financial Rail
At the heart of Kurz’s thesis is the profound transformation of crypto from a speculative asset to a critical piece of financial infrastructure. This “asset-to-infrastructure transformation” is, in his view, the defining narrative of the current cycle. The integration of traditional financial rails with crypto infrastructure represents a “significant and durable market structure evolution for global financial services.”
Bridging Worlds: Galaxy Digital’s Role
Founded by Michael Novogratz, Galaxy Digital stands as a crucial bridge in this evolving landscape. The firm provides institutional-grade services across trading, asset management, investment banking, custody, mining, and infrastructure, increasingly extending into consumer-facing products. This comprehensive approach underscores the deepening ties between established finance and the burgeoning digital asset ecosystem.
A Bull Market in Crypto Plumbing: The Infrastructure Boom
Kurz highlights that public blockchains are increasingly being recognized as institutional-grade infrastructure. This is evident in the accelerating adoption of stablecoins and tokenization, which are actively reshaping payments and broader market structures. The “tentacles of crypto infrastructure” are spreading across the entire spectrum of financial services, laying the groundwork for future growth.
Crypto on a Bigger Dashboard: New Opportunities and Challenges
The integration of crypto into Wall Street’s plumbing means it now resides on a much larger “dashboard” of global assets. This new regime brings both opportunities and trade-offs. While capital can flow across a broader opportunity set, crypto now competes more directly with established assets like gold and emerging technologies such as quantum computing. This elevated competition, according to Kurz, is a testament to the market’s growing maturity, demanding higher standards for attracting global capital.
The Path Forward: Maturity and Deepening Integration
Despite the current nascent stage of the relationship between crypto and traditional finance, Kurz sees a clear path towards deepening integration. The rapid growth of the infrastructure layer – encompassing custody solutions, robust compliance frameworks, and seamless integration with banks and financial institutions – signifies what he enthusiastically terms a “bull market in crypto plumbing.” This foundational build-out is not just preparing the ground for future innovation but is actively cementing crypto’s role as an indispensable, mature component of the global financial system.
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