Justin Tallis | Afp | Getty Images
Throughout its history, bitcoin and other cryptocurrencies have been subject to significant price fluctuations, whether due to larger macroeconomic factors affecting all asset classes or during “crypto winters” related to industry concerns.
But with a crypto-friendly Trump administration and expectations for the passage of a cryptocurrency market structure bill, many observers expected a new rise in digital assets to begin in 2026. However, it is exactly the opposite. Bitcoin is down more than 21% year to date and fell to $60,062.00 last week – its lowest level in about 16 months. This represents a drop of almost 50% from its October 2025 record.
What is causing this latest decline? Rather than a single event, Galaxy founder and CEO Mike Novogratz said Tuesday at the CNBC Digital Finance Forum in New York that it was a reflection of a broader shift in the industry. When bitcoin fell 22% in less than a day in November 2022 after FTX’s collapse, there was a “breakdown of trust,” Novogratz told CNBC’s MacKenzie Sigalos at the event. “This time there is no smoking gun,” he said. “You look around, what happened?”
Bitcoin price since early 2026
Novogratz noted the wipeout that occurred in October 2025 as a significant event, when more than 1.6 million traders suffered a combined wipeout of $19.37 billion in leveraged positions over a 24-hour period, a situation he said “wiped out many retailers and market makers” and put significant pressure on prices.
“Crypto is all about narratives, it’s about stories,” he said. “These stories take time to build and you draw people in… so when you eliminate a lot of those people, Humpty Dumpty doesn’t come back right away,” he said.
But Novogratz also expects the current economic downturn to lead to something more lasting, saying the recent era of crypto investing, “the era of speculation,” will be phased out as the crypto industry introduces “institutions where people have a different risk tolerance.”
“Retailers aren’t getting into crypto because they want to make 11% in annualized terms,” he said. “They come in because they want to win 30 to one, eight to one, 10 to one.”
Some traders will still speculate, Novogratz says, but overall, “this will be transposed or replaced by us using these same rails, these crypto rails, to bring banking (and) financial services to the whole world. And so, these will be real-world assets with much lower returns.”
He also highlighted tokenized stocks as assets that will have “a different return profile.”
Sigalos asked Novogratz if the eventual passage of the CLARITY Act could be a catalyst for the industry, with the crypto market structure bill’s stalled momentum on Capitol Hill being at least a short-term headwind. He is confident that a crypto market structure bill will eventually become law.
“I talked to (Senate Minority Leader) Chuck Schumer two nights ago and he said, ‘We’re going to pass the damn CLARITY Act,'” Novogratz said. “The Democrats want to pass the law, and the Republicans want it.”
Novogratz said the crypto industry needs this bill for “many reasons,” but notably: “We need it to bring some spirit back into the crypto market.”
