Michael Novogratz, the CEO of Galaxy Digital, says the recent rush to set up companies with large crypto holdings may have already peaked, even as some firms continue to build out their digital-asset portfolios.
Novogratz raised his concerns during Galaxy Digital’s second-quarter earnings call held on Tuesday. He noted that while there are “a tremendous amount of opportunities” in the crypto-treasury space, he believes the frenzy of new companies forming with crypto-heavy balance sheets has likely run its course.
“We’ve probably gone through peak treasury company issuance of new companies,” he said, adding that attention will now turn to which existing players can become “monsters” in the industry, Business Insider reported.
Many of these treasury firms began by following the lead of Strategy (formerly MicroStrategy), which made headlines for prioritizing bitcoin purchases. Novogratz described Strategy as “probably the single most important player in the bitcoin ecosystem,” and he expects other firms to mirror its playbook, raise capital through debt or equity, then use the proceeds to buy more digital tokens.
Ethereum could outperform Bitcoin in the short term
Among the newer companies, he highlighted BitMine Immersion, the Ethereum-focused treasury set up by Fundstrat co-founder Tom Lee, and SharpLink Gaming, backed by Joe Lubin. As reported by Cryptopolitan, both have amassed significant ethereum holdings in recent months, BitMine with over $2 billion and SharpLink with more than $1.3 billion since May, by replicating Strategy’s model but swapping ETH for BTC.
“Most of them are offering similar product, and so you’ll see them in different tokens, or different mixes of tokens,” Novogratz said. He predicted these established treasuries would continue to grow, while newer firms “will have a harder time getting oxygen” in a crowded field.
Novogratz also praised how treasury companies have helped broaden crypto’s appeal. “These treasury companies have done an amazing job of bringing people into the crypto tent,” he remarked. He expects them to remain vital as the market evolves and new ecosystems take shape.
In a CNBC interview earlier, Novogratz expressed confidence in Ethereum’s short-term outlook.
“I think Ethereum probably has a lot of chance to outperform Bitcoin in the next three to six months,” he said. He added that Ethereum could soon reach the $4,000 mark.
Investor sentiment appears to back that view. A Myriad poll found 59% of predictors expect ETH to set a new all-time high before the end of 2025. Corporate buyers have joined in, with BitMine Immersion and SharpLink using treasury strategies to boost Ethereum demand. On the retail side, ETH exchange-traded funds, approved by the Securities and Exchange Commission last year, drew $726 million in net inflows in a single day in July, their biggest 24-hour haul and over $2.1 billion across the week.
Galaxy Digital reports $30.7M profit for Q2
Returning to Galaxy Digital’s quarterly results, Novogratz noted the firm posted a net income of $30.7 million for Q2, compared with a $177 million loss in the same period of 2024.
Galaxy Digital works with more than 20 crypto-treasury investment firms, earning management fees for overseeing their token holdings. Those partnerships have added roughly $2 billion in assets to Galaxy’s platform, creating “recurring income that will go on and on,” Novogratz said.
Looking ahead, he sees treasury companies and ETFs as a way for hedge funds, and eventually traditional financial firms, to gain crypto exposure without directly holding tokens.
Yet he cautioned that “tokenization,” or putting conventional assets like stocks on a blockchain, remains unresolved. He pointed to “Project Crypto,” an SEC initiative led by Chair Paul Atkins to explore how US markets might shift toward blockchain. “The road map’s not written yet,” Novogratz said. “If you tokenize Apple stock, where does that liquidity exist? There isn’t a good answer yet. But we’re hyper-focused on it.”
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