Novogratz: Crypto Transitioning to an Institution-Led Ecosystem
The digital asset market is leaving behind its explosive speculative frenzy of the past and entering a mature financial ecosystem led by institutional investors, signaling a fundamental transformation of the industry.
According to cryptocurrency-focused media outlet Cointelegraph on Feb. 11 (local time), CEO Mike Novogratz attended the CNBC Digital Finance Forum in New York and declared that the era of speculation in digital assets has effectively come to an end. Novogratz explained that as retail investors chasing high returns have exited, risk-averse institutional investors have stepped in, shifting the market away from extreme volatility toward a more stable and sustainable return structure. “Retail investors don’t enter the digital asset market expecting 11% annual returns,” Novogratz said, emphasizing that while investors once sought gains of eight to thirty times their investment, that era is now over.
Novogratz recalled how the collapse of FTX in 2022 shattered market confidence, with Bitcoin (BTC) plunging 78% from $69,000 to $15,700. A large-scale leverage liquidation on Oct. 10 last year also dealt a severe blow to retail investors and market makers. He noted that rebuilding broken trust takes considerable time and that the market is currently experiencing growing pains as it works to establish a new narrative.
Tokenization of real-world assets is emerging as a powerful new growth engine for the digital asset industry. Novogratz predicted that the sector will move beyond high-yield speculation toward practical applications capable of delivering financial services globally. Sergey Nazarov, a co-founder, also expressed the view that tokenized real-world assets could surpass the total value of the broader digital asset market, fundamentally transforming the nature of the industry and reinforcing Novogratz’s outlook.
Changes in Bitcoin ownership were also identified as a key factor reshaping market dynamics. CEO David Marcus explained that holdings from long-term investors who directly owned Bitcoin are increasingly flowing into channels connected to traditional financial systems and markets. While shifts in ownership and leverage liquidations have disrupted market dynamics, Marcus added that investors who maintain a long-term belief in Bitcoin as a hedge against overall market risk are likely to be rewarded.
The digital asset industry has now moved beyond speculative excess and faces a new test of proving its real-world value. Novogratz expressed confidence that as digital asset technology is applied to enhance the efficiency of existing financial services, expected returns may decline compared to the past, but the market’s scale and stability will expand dramatically. Investors, rather than reacting to short-term price surges, should clearly understand the structural changes driven by real-world asset tokenization and institutional capital inflows and reassess asset values from a long-term perspective.
Disclaimer: This article is for investment reference only and we are not responsible for any losses resulting from investment decisions based on it. The content should be interpreted for informational purposes only.
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