Crypto Treasury Surge Has Peaked, Says Mike Novogratz

Mike Novogratz, CEO of Galaxy Digital, believes the surge in companies adding cryptocurrencies to their treasuries may have reached its high point.

During the firm’s Q2 2025 earnings call, Novogratz stated, “We’ve probably gone through peak treasury company issuance,” and he added that the focus is now shifting to identifying which existing firms will grow into industry giants.

Crypto Treasury Expansion Slows Amid Market Saturation

Crypto treasury firms that raise capital and invest corporate funds into digital assets have expanded rapidly recently, fueled by a crypto-friendly U.S. regulatory environment. New entrants have started diversifying into different assets like Ethereum (ETH), Solana (SOL), and much more, while initially investors used to follow Michael Saylor’s Bitcoin-centric model.

Ethereum is already seeing traction among treasury investors. Firms like Tom Lee’s BitMine and Joe Lubin’s SharpLink are two notable holders, and Novogratz expects them to continue scaling.

However, the window of easy growth may be closing for others. Despite the momentum, Novogratz warned that newer entrants may face a significant hurdle.

Earnings and Market Outlook

Galaxy Digital currently partners with over 20 crypto treasury investment firms, helping manage their digital asset portfolios. These partnerships have added around $2 billion in assets to Galaxy’s platform, contributing to what Novogratz describes as recurring income that will go on and on.

Further, Galaxy reported $30.7 million in net income in Q2 2025, a sharp turnaround from a $177 million loss in the same period last year. However, the firm posted $0.08 in diluted earnings per share, missing analyst expectations due to weaker spot trading activity.

Hedge Fund Strategy and the Path to Tokenization

As per Bloomberg, Novogratz emphasized that crypto treasury firms, along with exchange-traded funds (ETFs), provide a pathway for hedge funds to gain exposure to crypto without holding tokens directly. He believes that, over time, even traditional finance will move toward blockchain-based systems.

But challenges remain. Tokenization—converting conventional assets like stocks into blockchain-based tokens—is still an unresolved area.

Novogratz pointed to Project Crypto, a new initiative led by SEC Chair Paul Atkins, aimed at exploring a blockchain migration for the U.S. markets. He further stated that the roadmap was not yet written, and added, “If you tokenize Apple stock, where does that liquidity exist? There isn’t a satisfactory answer yet. But we’re hyper-focused on it.”