Novogratz made the remarks during a discussion with Alex Thorn, Galaxy Digital’s head of firmwide research. The conversation focused on long-term trends shaping digital assets — from Bitcoin and real-world asset tokenization to AI and the way investors are rethinking valuation across crypto markets.
According to Novogratz, tokens such as XRP and Cardano still rely heavily on loyal communities, but they are increasingly competing with networks that generate revenue and demonstrate real usage. He emphasized that future market cycles are likely to reward assets with measurable business fundamentals, rather than projects whose valuations are sustained primarily by user enthusiasm.
Community vs. economics
Novogratz noted that the crypto market is drawing a clearer line between money-like assets and “business tokens”. In his view, Bitcoin has already established itself as digital money with a relatively clear valuation framework. Many other tokens, by contrast, are increasingly being viewed as business-like assets that must justify their market caps through revenue and economic activity.
“If you’re not money — and Bitcoin is money — then you’re just a business,” Novogratz said. He added that during market repricing phases, business-like assets are typically valued far lower than monetary assets, which directly affects a project’s long-term sustainability.
In this context, he questioned whether Ripple and Cardano can remain relevant as the range of blockchain options expands. For investors, he argued, the key is not ideology but a simple metric: what economic output the network can deliver.
Usage and revenue take priority
Novogratz pointed out that many cryptocurrencies have grown over the past decade on speculation or community energy. However, he believes the next phase will be defined by practical use cases, transaction activity, and the ability to generate revenue.
As an example, he cited Hyperliquid, highlighting what he described as a transparent economic model. The platform directs a large share of profits toward token buybacks and burns, making the structure resemble an equity-style investment with direct value capture.
Contrasting that model with other networks, Novogratz pointed to projects with limited on-chain activity. He specifically mentioned Cardano, suggesting that despite a strong community, the blockchain’s real-world usage remains comparatively low.
Regulators and institutions add pressure
Novogratz also said that the regulatory environment is accelerating the shift toward utility-based evaluation. Supervisors increasingly look at the economic substance of projects rather than their technical narratives, raising the bar for tokens to demonstrate real functionality.
The U.S. Securities and Exchange Commission (SEC) continues to closely oversee the crypto market, focusing on the economic characteristics of digital assets. International regulators are taking a similar approach, prioritizing investor protection and broader financial stability.
Galaxy Digital’s research suggests a growing gap between projects with genuine usage and those with limited activity. Institutional investors are increasingly applying traditional evaluation criteria to crypto assets — including revenue potential, management quality, and competitive positioning — a shift that could reshape the market landscape heading into the next cycle.