Cryptocurrencies are no longer just an asset class, but are also an increasingly critical part of financial infrastructure, says Steve Kurz, global head of asset management and co-head of digital assets at Galaxy Digital (GLXY).
In “The Great Convergence,” the company’s investment outlook for 2026, Kurz lays out a plan that is pragmatic about what can be done now while remaining optimistic about the overall long-term outlook.
The story that defines this cycle, he maintains, is the transformation of assets into infrastructure.
“The convergence of traditional financial avenues with crypto infrastructure represents a significant and lasting evolution of the market structure for global financial services,” Kurz told CoinDesk in an interview.
Galaxy Digital, a digital asset financial services and investment company founded in 2018 by Michael Novogratz, serves as a bridge between traditional finance and the expanding cryptocurrency ecosystem. It offers institutional-grade trading, asset management, investment banking, custody, mining and infrastructure services and, increasingly, consumer-facing products.
A market trapped in overlapping cycles
Kurz characterizes the current environment as one in which “many cycles are overlapping.”
While crypto token prices have retreated substantially, it emphasizes that the levels reached now are below those where many fundamentally positive developments have occurred. That disconnect makes it “pretty hard not to scratch my head.”
In his view, the dominant force behind the recent price weakness has been the liquidity and leverage cycle.
While the October liquidity event and subsequent deleveraging weighed heavily on markets, they differed from 2022, when liquidations exposed structural fragilities in a less developed market architecture.
Today’s pullback is healthier. The ecosystem now includes more sophisticated instruments and better developed risk management frameworks. The liquidation, he maintains, was “a regular wave of deleveraging,” not a systemic collapse at the back end of the system.
Infrastructure is growing rapidly and prices generally respond only after tangible increases in activity and adoption, and not before, he said. When on-chain activity and engagement picks up again, the story will coalesce around it.
He admits that “there is always the possibility of a downturn,” but says that most of the dramatic selling has probably already occurred. Enough pain has been absorbed that consolidation, range-bound trading, or a gradual rally are more likely than a V-shaped recovery. Their base case is several months of consolidation followed by a firmer move in the second half.
A new regime: cryptocurrencies on a bigger board
At the center of his thesis: the integration of Crypto into Wall Street pipelines. With new connections to traditional finance, cryptocurrencies now sit on a much larger board of global assets, a position that comes with trade-offs.
Capital now flows through a broader opportunity set and cryptocurrencies compete more directly with established assets like gold or emerging themes like quantum technology. The bar for attracting global capital is higher.
According to Kurz, this is proof of maturity. The relationship between cryptocurrencies and traditional finance is still immature, but it is deepening. Public blockchains are increasingly seen as institutional-grade infrastructure. Stablecoins and tokenization are reshaping payments and market structure. The tentacles of crypto infrastructure are spreading into financial services.
This is what he calls a bull market in crypto plumbing. The infrastructure layer (custody, compliance frameworks, integration with banks and fintechs) is clearly moving forward. And while this may not immediately translate into price appreciation in the short term, it is critical to the long-term value of both the technology and the assets built on it.
The fusion of assets and technology.
The key to the “Great Convergence” is the fusion of cryptocurrencies as an asset class with cryptocurrencies as a technology stack. That integration is driving the creation of a larger, stronger chain economy.
Galaxy remains focused on crypto-native assets and believes the long-term bridge being built between infrastructure and capital markets is very likely to develop. Kurz is clear: this is not a short-term “buy the dip” trade; It is a structural change of several years.
Feelings, risks and the process of hitting rock bottom
Kurz notes that the gap between price, sentiment and underlying business activity “has never been wider.” While market pricing has struggled, business activity, especially in the infrastructure space, remains strong. That divergence gives Galaxy conviction.
It downplays existential fears, such as quantum computing, as immediate threats to the viability of cryptocurrencies. More generally, he notes that periods of intense negativity often coincide with market lows. At the same time, he identifies a more subtle risk: apathy. A loss of relevance in the broader conversation about the market would be more worrying than the volatility itself.
bitcoin In his experience, he often acts as a “canary in the coal mine.” Historically, it has been adept at detecting macro risk moves before other markets react. It is possible, he suggests, that BTC has sensed broader conditions of risk aversion and absorbed the pain first. That dynamic can work in both directions.
Having “lived long enough with bitcoin,” Kurz believes it can be evaluated through a cyclical macro lens. Cryptocurrencies are no longer traded in isolation; it is increasingly intertwined with broader cycles of liquidity and risk.
Galaxy performance and strategic positioning
In this context, Galaxy sees strong momentum in its core businesses, particularly in infrastructure and asset management. At the end of last year, Galaxy had $12 billion in assets on its platform.
When it comes to infrastructure, Galaxy is doing more than it did a year ago. It provides technology and payments services to banks and fintech companies, and its ability to integrate services with traditional financial institutions continues to improve.
In terms of asset management, Galaxy is expanding its offering, including the introduction of a fintech hedge fund designed for wealth and high net worth channels.
According to Kurz, the disruption of the financial services market structure represents a “Fintech 2.0” moment and creates investment opportunities in both the public and private markets.
“Galaxy’s Fintech Fund will focus on the winning and losing public markets of the great convergence, while Galaxy Ventures will continue to invest in early-stage companies around the world that are building high-quality, cryptocurrency-based financial services businesses.”
Institutional allocators, pensions, sovereign wealth funds and other asset owners often view cryptocurrencies as cyclical. But many of these allocators are now making new capital allocation decisions. Galaxy reports having achieved deals between banks, wealth intermediaries and institutional asset owners, facilitating the entry of capital flows even during a consolidation phase.
Institutional assets under management (AUM) remains a key focus and the firm is seeing increasing engagement from large clients. The gap between moderate pricing and stable institutional interest reinforces Galaxy’s long-term thesis.
Own the great convergence
Ultimately, Kurz frames Galaxy’s strategy as “owning the entire story of the great convergence,” from crypto rails and on-chain infrastructure to public markets and asset management.
The company is positioning itself across sectors, capturing both the technological integration of cryptocurrencies into traditional finance and the financialization of cryptoassets.
For 2026, the outlook is measured and constructive. Let’s not expect a V-shaped recovery. Expect consolidation, maturation and continued infrastructure development. Expect cryptocurrencies to compete on a broader stage for global capital. And expect the narrative to catch up with the activity once it changes.
In Kurz’s view, the pipelines are being prepared for a larger, more lasting chain economy. Prices may lag in the short term, but the long-term merger of assets and technology leaves you structurally bullish on digital assets and confident in Galaxy’s role at the center of that convergence.
Read more: Deutsche Bank says bitcoin selloff indicates loss of conviction, not broken market
