Crypto is no longer just an asset class, it is also an increasingly critical part of financial infrastructure, says Steve Kurz, global head of asset management at Galaxy Digital (GLXY) and co-head of digital assets.
In “The Great Convergence,” the company’s investment outlook for 2026, Kurz lays out a pragmatic plan for what can be done now while remaining optimistic about the overall long-term picture.
According to him, the defining story of this cycle is the transformation of assets into infrastructure.
“The convergence of traditional financial rails with crypto infrastructure represents a significant and lasting shift in market structure for global financial services,” Kurz told CoinDesk in an interview.
Galaxy Digital, a financial services and digital asset investment company founded in 2018 by Michael Novogratz, functions 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 caught in overlapping cycles
Kurz characterizes the current environment as one where “many cycles overlap.”
Although crypto token prices have fallen significantly, he points out that the levels reached are now below where many fundamentally positive developments occurred. This disconnect makes it “pretty hard not to scratch your head.”
According to him, the dominant force behind the recent price weakness has been the liquidity and debt cycle.
While the October liquidity event and subsequent deleveraging weighed heavily on markets, they differ from those of 2022, when liquidations exposed the structural fragilities of a less developed market architecture.
Today’s perspective is healthier. The ecosystem now includes more sophisticated instruments and better-developed risk management frameworks. The liquidation, he asserts, was “a regular wave of deleveraging,” not a systemic breakdown downstream of the system.
Infrastructure is growing rapidly and prices typically respond only after a tangible increase in activity and adoption, rather than before, he said. When on-chain activity and engagement increases again, the story will focus around it.
He admits that “there’s always the possibility of a decline,” but adds that most of the dramatic sales have probably already happened. enough pain has been absorbed that consolidation, range-bound trading, or a gradual rise are more likely than a V-shaped recovery. His base case calls for several months of consolidation followed by a firmer move in the second half.
A new regime: crypto on a bigger dashboard
At the center of his thesis: the integration of Crypto into the plumbing of Wall Street. With new connections to traditional finance, crypto now features on a much larger dashboard of global assets, a position that involves trade-offs.
Capital is now flowing to a broader set of opportunities, and crypto competes 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 a sign of maturity. The relationship between crypto 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 progressing. And while this may not immediately translate into short-term price appreciation, it is fundamentally important to the long-term value of the technology and the assets built on it.
The Merger of Assets and Technology
The key to the “Great Convergence” is the merging of crypto as an asset class with crypto as a technology stack. This integration leads to the creation of a larger and more robust on-chain economy.
Galaxy remains focused on crypto-native assets and believes that the long-term bridge being built between infrastructure and capital markets is very likely to come to fruition. Kurz is clear: this is not a short-term buying operation during a downturn; this is a multi-year structural change.
Sentiment, risks and bottoming out processes
Kurz notes that the gap between prices, sentiment and underlying trading activity has “never been wider.” Even though market prices have struggled, commercial activity, particularly on the infrastructure side, remains strong. This divergence gives Galaxy conviction.
He downplays existential fears, such as quantum computing, as immediate threats to crypto’s viability. More generally, he observes that periods of intense negativity often coincide with market bottoms. At the same time, he identifies a more subtle risk: apathy. A loss of relevance in the broader market debate would be more concerning than the volatility itself.
Bitcoin in his experience, often acts like a “canary in the coal mine.” Historically, it has been able to detect movements in macroeconomic risk before other markets react. It is possible, he suggests, that BTC detected broader risk-averse conditions and absorbed the pain first. This dynamic can work both ways.
Having “lived enough with Bitcoin,” Kurz believes this can be assessed through a macro-cyclical lens. Cryptocurrencies are no longer traded in isolation; it is increasingly closely linked to broader cycles of liquidity and risk.
Performance and strategic positioning of Galaxy
In this context, Galaxy is seeing strong momentum in its core businesses, including infrastructure and asset management. At the end of last year, Galaxy had $12 billion in assets on its platform.
On the infrastructure side, Galaxy is doing more than a year ago. It provides technology and payment services to banks and fintech companies, and its ability to integrate services with traditional financial institutions continues to improve.
When it comes to asset management, Galaxy is expanding its offering, including introducing a fintech hedge fund designed for high-net-worth and high-net-worth channels.
The disruption in the market structure of financial services represents a “Fintech 2.0” moment and creates investment opportunities in public and private markets, according to Kurz.
“Galaxy’s Fintech Fund will focus on the winners and losers of the grand convergence public markets, while Galaxy Ventures will continue to invest in early-stage companies across the world that are building high-quality crypto-based financial services businesses.
Institutional allocators, pensions, sovereign wealth funds, and other asset owners often view crypto as cyclical. But many of these allocators are now making new capital allocation decisions. Galaxy reports winning business from banks, wealth intermediaries and institutional asset owners, facilitating inbound capital flows even during a consolidation phase.
Institutional assets under management (AUM) remain a key priority and the company is seeing increasing engagement from large clients. The gap between moderate pricing and consistent institutional interest reinforces Galaxy’s long-term thesis.
Possess the great convergence
Ultimately, Kurz defines 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 positions itself across the entire stack, capturing both the technological integration of crypto into traditional finance and the financialization of crypto assets.
For 2026, the outlook is measured and constructive. Don’t expect a V-shaped recovery. Expect continued consolidation, maturation and construction of infrastructure. Expect crypto to compete on a broader stage for global capital. And expect the narrative to catch up with the activity once it turns.
In Kurz’s view, the plumbing is being laid for a larger, more sustainable chain economy. Prices may lag in the short term, but the long-term merger of assets and technology makes him structurally bullish on digital assets and confident in Galaxy’s role at the center of this convergence.
Learn more: Deutsche Bank says bitcoin selloff signals loss of conviction, not broken market
