Steve Kurz, global head of asset management and co-head of digital assets at Galaxy Digital (GLXY), said cryptocurrencies are no longer just an asset class but an increasingly important part of financial infrastructure.
In the company’s 2026 investment outlook, “The Big Convergence,” Kurtz laid out a plan that remains pragmatic about what can be done now while remaining optimistic about the longer-term big picture.
He believes the defining story of this cycle is the transition from assets to infrastructure.
“The convergence of traditional financial rails with crypto infrastructure represents a significant and lasting evolution in the structure of the global financial services market,” Kurtz told CoinDesk.
Galaxy Digital is a digital asset financial services and investment company founded in 2018 by Michael Novogratz that serves as a bridge between traditional finance and the expanding cryptocurrency ecosystem. It provides institutional-grade trading, asset management, investment banking, custody, mining and infrastructure services, as well as a growing number of consumer-facing products.
Markets stuck in overlapping cycles
Kurtz described the current environment as “many cycles stacked on top of each other.”
Although crypto token prices have retreated significantly, he stressed that the levels currently reached are below those where many fundamentals are developing positively. The disconnect makes it “hard not to scratch your head.”
He believes the dominant forces behind recent price weakness are liquidity and leverage cycles.
While October’s liquidity event and subsequent deleveraging put heavy pressure on markets, unlike in 2022, the liquidations then exposed structural vulnerabilities in the architecture of less developed markets.
Today’s pullback is much healthier. The ecosystem now includes more sophisticated tools and a more complete risk management framework. He believes the sell-off was “a regular wave of deleveraging” rather than a systemic collapse at the back end of the system.
Infrastructure is evolving rapidly, he said, and prices often react only after a significant increase in activity and adoption, rather than before. When on-chain activity and participation picks up again, the story will coalesce around it.
He acknowledged that “there’s always the possibility of a decline,” but said much of the dramatic sell-off may have already occurred. Enough pain has been absorbed that consolidation, range trading, or a gradual move higher is more likely than a V-shaped recovery. His basic scenario is to consolidate for a few months and then move into the second half of the year.
New Regime: Cryptocurrencies on a Bigger Dashboard
At the heart of his thesis: Cryptocurrency’s pipeline into Wall Street. With new ties to traditional finance, cryptocurrencies now occupy a larger dashboard of global assets, a position that comes with trade-offs.
Capital is now flowing to a broader opportunity set, with cryptocurrencies competing more directly with existing assets like gold or emerging themes like quantum technology. The threshold for attracting global capital is higher.
Kurtz believes this is evidence of maturity. The relationship between cryptocurrencies and traditional finance is still immature, but it is deepening. Public blockchains are increasingly viewed as institutional-grade infrastructure. Stablecoins and tokenization are reshaping payments and market structures. Crypto infrastructure is spreading its tentacles across the financial services sector.
This is what he calls the crypto pipeline bull run. The infrastructure layer – custody, compliance frameworks, integration with banks and fintech – is clearly improving. While this may not translate into immediate price appreciation in the short term, it is critical to the long-term value of the technology and the assets based on it.
Integration of assets and technology
The key to the “Great Convergence” is the merging of cryptocurrencies as an asset class with cryptocurrencies as a technology stack. This integration is driving the creation of a larger, more powerful on-chain economy.
Galaxy remains focused on crypto-native assets and believes the long-term bridge created between infrastructure and capital markets is likely to work. Kurtz was clear: This was not a short-term “buy the dip” trade; This is a multi-year tectonic shift.
Emotion, Risk, and the Bottoming Process
Kurtz noted that the gap between prices, sentiment and underlying business activity “has never been greater.” Although market prices have been struggling, business activity, particularly in infrastructure, remains strong. This disparity convinced the Galaxy.
He downplayed existential fears such as quantum computing, viewing them as direct threats to the viability of cryptocurrencies. More broadly, he observed that periods of strong negative sentiment tend to coincide with market bottoms. At the same time, he discovered a subtler risk: apathy. Loss of relevance in the broader market conversation will be more concerning than the volatility itself.
Bitcoin In his experience, he often plays the role of “the canary in the coal mine”. Historically, it has been good at sniffing out macro risk moves before other markets react. He believes it’s possible that Bitcoin sensed broader risk-off conditions and absorbed the pain first. This dynamic can work both ways.
Kurtz “has been around Bitcoin enough” that he believes it can be evaluated through a cyclical macro lens. Cryptocurrency is no longer an isolated trade; it is increasingly intertwined with broader liquidity and risk cycles.
Galaxy’s performance and strategic positioning
Against this background, Galaxy’s core businesses, especially its infrastructure and asset management businesses, are developing strongly. As of the end of last year, assets on the Galaxy platform had reached $12 billion.
On the infrastructure front, Galaxy is doing more than it did a year ago. It provides technology and payment services to banks and fintech companies, with an increasing ability to integrate services with traditional financial institutions.
On the asset management side, Galaxy is expanding its product offerings, including launching fintech hedge funds designed for wealth and high-net-worth channels.
Kurtz said the disruption in the structure of the financial services market represents a “Fintech 2.0” moment and creates investment opportunities in both public and private markets.
“Galaxy’s fintech fund will focus on the winners and losers of the public market convergence, while Galaxy Ventures will continue to invest in early-stage companies around the world that are building high-quality, cryptocurrency-enabled financial services businesses.”
Institutional allocators, pension funds, sovereign wealth funds and other asset owners often view cryptocurrencies as cyclical. But many allocators are now making new capital allocation decisions. Galaxy reports it is winning business from banks, wealth intermediaries and institutional asset owners, facilitating capital inflows even during the consolidation phase.
Institutional assets under management (AUM) remain a key focus, with the firm seeing increased participation from large clients. The disparity between depressed prices and solid institutional interest reinforces Galaxy’s long-term thesis.
Have great integration
Ultimately, Kurtz defined Galaxy’s strategy as “owning the whole story of big convergence,” from cryptocurrency rails and on-chain infrastructure all the way to public markets and asset management.
The company positions itself across the entire stack, capturing the integration of crypto with traditional finance and the financialization of crypto assets.
For 2026, the outlook is cautious and constructive. Don’t expect a V-shaped recovery. Expect consolidation, maturity and continued infrastructure development. Cryptocurrencies are expected to compete for global capital on a broader stage. And expect that once the story takes a turn, the narrative can keep up.
Kurtz believes that the pipeline is being laid for a larger and more durable on-chain economy. Prices may lag in the short term, but the long-term integration of assets and technologies makes him structurally bullish on digital assets and confident in Galaxy’s role at the center of integration.
Read more: Deutsche Bank says Bitcoin sell-off points to loss of faith, not market collapse
