Galaxy Digital Founder & CEO Mike Novogratz Talks Cryptocurrency, Bitcoin | Bloomberg Talks

Unfortunately, that's true.

Listen, you never actually know where markets bottom. Crypto, when Bitcoin went through 100,000, that was a major level that it broke down on. And so when I look at the chart, 70 to 100 is probably the new range, and we're at 76, so I think we're towards the bottom end of the range. There's a lot of pessimism out there, a lot of leverage has been taken out of the system. Bitcoin was not supposed to act like this, right? You had gold prices higher, the NASDAQ higher, rates going lower. The Trump administration was very pro-crypto. And so, you know, something went wrong. The crypto market is still less than 20 years old, right? Think Bitcoin '09. So we're 16 years old. And it's immature. We had a huge run-up from where people bought at 50, 100, 1,000, 2,000, 10,000 all the way to 130,000. And I think what ended up happening was people finally started taking profits after we crossed 100. It felt like the community had won and it was that sigh of relief like we did it, we created this amazing ecosystem, this amazing asset. And there's been kind of like a sellers' virus that got into the market. People blamed it on quantum. I don't think quantum in the long run is really the reason. I think there was selling and that selling is getting executed in the market. There was buying, sure, lots of new institutions are coming in, but prices are set on the margin and there have been more sellers than buyers. I think we're getting close to the bottom, but we'll see. You always know a bottom after you see it. And listen, there's a couple things that could help, right? A structure bill passing would be a big deal. People are really pessimistic on it right now. I actually am a little more optimistic that things get done because I think both sides want it done, but we'll see.

Yeah, listen, part of this acceleration recently downwards is the thought that Kevin Warsh is going to be very hawkish. Listen, what I think Kevin did is he took out the tail risks for inflation, right? He's a man of integrity. He has worked alongside Stan Druckenmiller for a long time, literally since he left the Fed. And so you don't think he's going to do whatever Trump wants him to do. That said, he's pretty dovish right now, and I think once he gets in and starts talking, looking at the environment that we see today, he wants rates lower. And I think once that market kind of rewrites him as a dove, at least a dove, given the current environment, that also could help. There's probably been an overreaction on how hawkish he's going to be. But I do think, listen, he took out the tail risk, which is a good thing for America and not necessarily a good thing for gold, silver, or Bitcoin.

Yeah, the great thing about this hedge fund is it's really a fintech fund and it's the broader ecosystem. So, I said on our call, this is a tale of two cities or really three cities because we have this data center business which is booming. Thank god. If I didn't have the data center business, I'd feel a lot worse. But our data center business is now worth more than our crypto business. But within crypto, there's still a bull market and there's a bull market in infrastructure, right? The traditional banks and finance companies are moving into this space quickly and we're seeing lots of opportunities to partner with them around building wallets, around staking, and around really thinking about how tokenized real-world assets move into the world. And so I think I haven't seen more excitement since I started from the traditional players to get engaged in digital assets. And we've got the old version of crypto, the tokens that exist today that just don't seem to have the same support, the same appreciation, the same energy in them right now. And so some of that energy has shifted and you see things like perpetual swaps on equities booming all of a sudden. So using the crypto infrastructure for real-world assets, the crypto leverage system for real-world assets. And so that part of the business is really exciting. We're leaning into it both in hiring and utilizing our engineering team to help others get in this game. The other part is moving things more on-chain and that is happening quickly, right? So you're going to see credit on-chain and you already see the boom of stablecoins. I mean, you look at the volume of stablecoins in the first month of the year, it's explosive. And so, we are moving into a digital world and it's going to run on crypto, blockchain rails. That's just not correlating with the price of Bitcoin, the price of Ethereum, the price of Solana, Ripple, you name it.

Listen, we are in the build mode on the data center business. We just got 530 megawatts of power approved down in Texas. That's probably the largest new power approval in the United States for a while. And so I couldn't be more excited about that. We're engaging now with potential tenants. You can guess who they are. And so I think we're going to run this data center business and we're going to grow this data center business ourselves. The capital structure at Galaxy is something we think about a lot and I said before if A plus B is a bigger number than A plus B, we should stay together. And if it looks like we're getting penalized, we'll figure a way to maximize shareholder value. And so right now, in the short term, our stock seems to trade very cheap relative to what I think the data center business is worth alone, let alone the value of our book and our crypto business. And so, yeah, we're certainly looking at it.