Interview with Galaxy Founder: Bitcoin Will Continue to Rise, and Stock Tokenization Will Capture the Attention of the Entire Financial World
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Interview with Galaxy Founder: Bitcoin Will Continue to Rise, and Stock Tokenization Will Capture the Attention of the Entire Financial World
Cryptocurrency must go beyond a single asset to truly impact the entire financial market.
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Guest: Mike Novogratz, Founder and CEO of Galaxy Digital
Hosts: David Hoffman; Ryan Sean Adams
Podcast Source: Bankless
Original Title: Bitcoin Hits Escape Velocity! Mike Novogratz on the Bond Crisis, Genius Act & AI’s Crypto Future
Release Date: June 2, 2025
Key Takeaways
Mike Novogratz returns to Bankless to unpack Bitcoin's all-time high and its significance in a world of fiscal uncertainty.
This episode dives into the latest developments in the bond market crisis, how the GENIUS Act ushers in a new era for stablecoins, tokenization within traditional finance, and Galaxy’s unique positioning at the intersection of crypto and artificial intelligence. It’s a deep conversation about macroeconomic shifts and crypto’s role in the evolving financial landscape.
Highlights Summary
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Bitcoin market growth has entered an irreversible phase.
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I don’t think the dollar will lose its status as the global reserve currency, but its appeal may weaken. Other countries might lose confidence in the dollar and choose to shift part of their reserves into Bitcoin and gold. The value of Bitcoin and gold will continue to rise.
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No president can stand up against the bond market—the bond market is the real “gorilla” in charge.
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Blockchain is fundamentally a "trust machine," but we first need to teach people how to trust this "machine of trust," otherwise it just looks like a scam.
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I believe the GENIUS Act has a 99% chance of passing.
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Crypto is loved by many—it should be a bipartisan technology, not a politicized tool. For most Americans, crypto today feels more like a speculative casino, nothing more.
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What will truly capture Wall Street’s attention is tokenized stocks. Crypto must move beyond single assets to meaningfully impact the broader financial system.
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We're currently working with the SEC, and may tokenize Galaxy’s own stock soon. The level of cooperation is night-and-day compared to before.
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We now have fast enough blockchain technology and a regulatory environment that is both lenient and clear—both are crucial and mutually reinforcing.
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We need to push forward decentralized systems and accelerate asset tokenization. In the future, bank accounts, checking accounts, even brokerage accounts could exist as crypto wallets.
Bitcoin Reaches All-Time High
Ryan:
Bitcoin hit a new all-time high during our recording, surpassing $109,900. Mike Novogratz, what does this feel like for you?
Mike:
Ever since Larry Fink started investing in Bitcoin, we've been pushing this market together. At first, it was like a snowball rolling down a hill, slowly growing. Then it reached the top, paused for a while, and now it’s accelerating downhill—unstoppable. That "snowball" is Bitcoin adoption—more and more people are using it. Larry played a very important role in this process.
Now you see sovereign wealth funds, equity investors, companies like MicroStrategy launching products—all participating. This trend makes me feel that Bitcoin market growth has entered an irreversible phase. If we can hold the $106,000–$107,000 range for three to four days, we’ll open up further upside and enter a new price discovery phase.
Why is this happening? First, increasing adoption; second, look at the U.S. fiscal situation—the budget deficit this year will be higher than last year, which many didn’t expect. I respect Scott Bessent—he’s good—but he promised deficits would stay around 3%, and clearly we’re far off track.
Trump’s Tariffs and Bitcoin
David:
Can you give us some context? This all-time high isn’t random. You mentioned local factors and recent news. I noticed Bitcoin’s peak came right after the Senate voted in favor of the GENIUS Act—clearly no coincidence. But there are other factors, like Trump announcing "Tariff Day" and related policies about four or five weeks ago. These events unfolded alongside Bitcoin’s surge. Can you help us understand the logic behind this?
Mike:
The U.S. dollar as the global reserve currency is under immense pressure. It’s hard to accuse other countries of lying and stealing while simultaneously asking them to keep supporting the dollar—or even depend entirely on it or become U.S. vassals. This contradictory stance is weakening the dollar’s international position, both in credibility and as an economic tool. When the dollar weakens, other assets naturally rise in value. So, this partly reflects bearish sentiment toward the dollar and partly concerns over global fiscal stability. For example, long-term Japanese bonds have already seen major declines, and today U.S. long-term yields fell below 5%. When investors lose confidence in G10 government bonds, they seek alternative safe havens. Gold, silver, large-cap equities, and commodities become attractive. And now, Bitcoin—viewed as “digital gold”—has joined that list.
Ryan:
So how do you think this ends? We had Arthur Hayes on earlier, and he made some predictions. He believes the Trump administration went too far on tariffs and might now pull back. But perhaps they intend to undermine Treasuries’ status as a reserve asset—maybe even deliberately.
Mike:
Arthur is very smart, but I’ve worked in the bond market for 35 years. I know Scott Bessent well. No country with $35 trillion in debt would intentionally damage the credibility of the world’s largest bond market—it would be self-destructive.
Ryan:
But Arthur argues that if they want to fix trade imbalances, they must do exactly that—perhaps through capital controls or boosting yields to attract investment. Besant’s solution, he says, is to call Fed Chair Powell directly and push for "Quantitative Easing 2.0."
Mike:
The Fed has remained restrained. You can tell from every Powell press conference—he doesn’t want to intervene directly. Besant might use his authority to push for long-term bond purchases, but Powell won’t announce it himself because that’s not his mandate. This whole situation stems from current government policy. If Powell sees threats to market stability or risks to inflation and employment goals, he might act. His dual mandate requires balancing market stability with economic growth. So yes, if the bond market really destabilizes, I believe emergency meetings will happen inside the government to find solutions.
Historically, in the UK, Liz Truss was forced to resign under similar conditions. But the U.S. doesn’t have a parliamentary system—removing a president is hard. Still, the U.S. has mechanisms to adjust presidential policies, like renegotiating tariff agreements. In American history, no president has ever successfully defied the bond market—the bond market is the true "gorilla" in control.
"Liz Truss Moment 2.0"?
Ryan:
Do you think we’re approaching a "Liz Truss moment"? Is the market heading in that direction?
Mike:
Today’s situation gives me that feeling. There’s been a sell-off in long-term bonds. A recent Treasury auction performed poorly—very negative market reaction—causing yields to drop 6% to 7%. That flipped equities from gains to losses, halted Bitcoin’s rally, and created intense market tension.
A "Liz Truss moment" refers to when she became UK Prime Minister and introduced aggressive economic reforms to rapidly transform Britain’s economy. But bond markets revolted, investors lost confidence, bond prices collapsed, and yields spiked. Market pressure forced her resignation within three weeks. That’s why we call such events a "Liz Truss moment."
The bond market acts as the "night watchman" of economic policy. If markets judge your policies as flawed, investors stop buying Treasuries or demand higher yields as compensation. In such cases, governments must adjust. Our system relies heavily on borrowing. And now, we carry the largest debt burden in history—expanded under both Trump and Biden. Actually, it was deteriorating even before Trump took office.
Then came the pandemic. Both parties saw a chance to "go big." They needed to respond to the shock, but many policies clearly exceeded actual needs. Now, we’re paying the price for those excesses.
Implications of a U.S. "Liz Truss Moment"
Ryan:
Suppose the bond sell-off intensifies, yields keep rising, and we trigger a U.S. version of the "Liz Truss moment." What might the consequences be?
Mike:
It could force the government toward more conservative fiscal policies—"fiscal hawks." They might propose tax cuts, like eliminating tip taxes and overtime taxes, claim they won’t raise taxes on anyone, yet still increase military spending. But markets are clear: spending must be reduced, not increased.
I believe America must tighten fiscal policy. The Fed is also in a delicate spot. If inflation demands higher rates but the Fed holds steady, inflationary pressures could worsen. The sell-off reflects investor fears about inflation.
Tariffs are another key factor. In the short term, higher tariffs tend to push prices up, fueling inflation—inevitably. Long-term, they might suppress growth and cause deflation. But right now, tariff adjustments feel like hidden tax hikes, making things more complex.
As Treasury Secretary—or even President—the top priority must be restoring market confidence. Today’s market decline and dollar weakness are warnings: investors are losing faith in U.S. economic policy. If this isn’t corrected, consequences will be severe.
Bitcoin, Gold, and the Dollar
David:
It’s Bitcoin’s time now. Today, Bitcoin dropped $3,000 from its peak—possibly linked to the Treasury market issues you mentioned. Meanwhile, gold has stayed near record highs over the past quarter. Are these two parts of the same story, with Bitcoin lagging? Or are they entirely different phenomena?
Mike:
You can say there’s a connection between Bitcoin and gold—they’re like "distant cousins." Gold rose mainly because central banks are diversifying holdings. They’re buying gold aggressively, pulling it off the market. This comes largely from BRICS central banks reducing reliance on U.S. assets—logical. But central banks haven’t started buying Bitcoin yet. Though we see sovereign wealth funds dipping in—over $500 million invested in Bitcoin so far. That’s significant, but Bitcoin’s reserve scale is nowhere near gold’s trillion-dollar level.
Ryan:
Mike, are you saying the Trump administration didn’t intentionally weaken Treasuries as a global reserve asset, but it might be happening anyway, regardless of intent?
Mike:
It’s a delicate balance. When Robert Rubin was Treasury Secretary, he openly supported a strong dollar. Scott Bessent might say he supports a strong dollar too, but cyclically, they sometimes want the dollar to weaken slightly. How do you balance "strong dollar" rhetoric with cyclical depreciation? The usual line: long-term we support strength, short-term we allow adjustment. But when the dollar weakens, Americans’ purchasing power drops—trips to Europe get pricier, Italian furniture and Mercedes cost more. We become "poorer."
Ryan:
But some argue that when you say "poorer," you mean people who travel to Europe or buy luxury goods. A key argument for dollar depreciation is that America needs to revive domestic manufacturing by adjusting trade imbalances. After all, theories like the "Triffin Dilemma" suggest that a country with both global reserve currency status and a strong currency struggles to maintain competitive domestic manufacturing.
Mike:
True. The Trump administration tried bringing manufacturing back—that’s commendable and achieved some progress. But reversing 30 years of global supply chains overnight is nearly impossible. Critical resources aren’t in the U.S.—like lithium, mostly in Argentina and Chile. These supply chains are labor-intensive—closing a 30% cost gap isn’t enough.
Look at wage differences. U.S. median income is $50k–$60k—near the global top 1%. That huge gap means countries like Vietnam remain competitive even if costs are 30% higher. Without full automation, reshoring is impractical. Even with robots, job creation won’t match expectations.
Bitcoin as a New-World Asset
Ryan:
Regarding Treasuries as global reserve assets, we’ve seen marginal signs of weakening—linked to crypto’s rise over the past decade. Especially Bitcoin, increasingly seen as a new form of global reserve asset. If Treasuries’ status declines, what replaces it? Do you think Bitcoin will be the answer this decade?
Mike:
Historically, the global reserve asset has been the dollar. Its dominance has lasted about 80 years—a cycle not easily broken. A nation becomes the reserve currency mainly by controlling oceanic trade routes. Whoever has the strongest navy becomes the reserve issuer. But with diversified global transport, naval superiority isn’t the only factor anymore.
Today, being a global reserve currency also requires providing global security and having a widely trusted legal system. The U.S. spends 3.8% of GDP on defense—less than the historical 5%, but still far above others (0.5%–1.5%). This high cost maintains reserve status and brings massive economic and political advantages. But the Trump administration seems unaware. Pulling out of NATO or weakening it, retreating from the post-WWII global network—these moves could erode the dollar’s long-term reserve standing.
Declining Demand for Treasuries
Ryan:
Russell Napier, Scotland’s monetary historian, believes that as U.S. Treasuries' role as global reserve assets evolves, alternatives may emerge. The world could split into two major economic blocs. One led by the U.S. and allies, still using Treasuries. The other centered on China. In the Chinese bloc, the yuan might be partially backed by gold, since historically, the yuan hasn’t served well as a store of value—more a payment tool than a savings vehicle. What do you think about this potential bifurcation of the global economy?
Mike:
I think this trend is possible. For example, BRICS nations might launch a stablecoin partially backed by gold—not fully gold-backed, but holding some gold in reserves. That’s my speculation. For major powers, currencies usually aren’t completely unbacked.
Now, countries might say: "Our currency is backed by national reserves—we’re a wealthy nation." In a sense, currency value is supported by state assets and taxing power. Theoretically, every nation’s currency should be "AAA-rated" domestically—absolutely trustworthy. After all, a country can always print its own money, so default risk in local currency is very low. But will others borrow across borders or store wealth in that currency?
Right now, dollar yields remain attractive, and the yuan is the only potential rival. Yet I don’t think the yuan is ready to replace the dollar—China still has a long way to go in earning global trust. So, I don’t believe the dollar will lose its reserve status, but its appeal may weaken. Other nations might lose confidence and shift part of their reserves into Bitcoin and gold.
I’ve followed Bitcoin and gold for four years—this changed my investment thinking. I even started my own podcast on these topics. I collect gold coins and often gift them. Since I was 16, I told friends: "Never sell these gold coins—they’ll one day be worth $3,000." Now I think they could hit $10,000. I even need to reconsider storage—losing 50 ounces of gold would be a disaster. But I’m convinced Bitcoin and gold values will keep rising—and this view is gaining wider acceptance.
Galaxy’s IPO Journey
David:
Galaxy successfully listed on Nasdaq on May 16. The entire IPO process reportedly took 13 months, though it was expected to take 90 days. Can you share your experience? Was it frustrating?
Mike:
The preparation took longer than expected, and we missed the optimal listing window. Under Jay Clayton and the Trump administration, Coinbase and mining firms passed review. But under Gary Gensler’s SEC chairmanship, we faced much stricter regulation.
David:
How many attempts did you make? Or did you know upfront he wouldn’t approve?
Mike:
No doubt, the crypto space has had scams and scandals. Sam Bankman-Fried set public trust back 18–24 months. It’s ironic—most of us entered crypto to move from trusting governments to trusting cryptography. Blockchain is a "trust machine," but we forgot we must first teach people to trust this "machine of trust"—otherwise it looks like a scam.
But I’m glad to see more Republicans and Democrats now understanding crypto’s value. Senators Warner and Gaegos took neutral stances on crypto legislation and gained left-wing support. Elizabeth Warren criticizes crypto, but her views are increasingly challenged. She claims crypto enriches the few unfairly—a problem needing restraint. But pro-crypto voices are fighting back.
In today’s polarized politics, pushing crypto legislation is tough. But I’m optimistic—stablecoin bills achieved bipartisan support. Market structure bills will be harder—not due to party lines, but internal industry conflicts. Can Coinbase act as custodian, broker, and exchange operator? Forbidden in traditional finance, but allowed in crypto? If you’re Coinbase, you support it; if you’re a competitor, you oppose. With so many stakeholders, market structure bills are more complex than stablecoin ones.
The GENIUS Act
Ryan:
Congress is debating two major crypto bills: the GENIUS Act and the Market Structure Bill. Let’s start with the GENIUS Act. What are your thoughts?
This vote was about advancing the bill to further discussion, so multiple votes remain before final passage. I heard final voting might happen after Memorial Day. Do current support levels guarantee passage?
The bill must return to the House and complete the legislative process. But Senate approval is the critical step. What changed in the Senate over the past year to make this possible?
Mike:
I’d say it’s virtually certain. Unless something extraordinary happens, it won’t be blocked. I give it a 99% chance of passing.
From the crypto industry’s perspective, Democrats realized too late. They overlooked a key fact: more Americans own crypto than own dogs. This phrase started on Twitter—I borrowed and promoted it, and it gained traction. I joked Democrats became the "anti-dog party." That was unwise.
Crypto is beloved by many—it should be bipartisan tech, not a political weapon. But Democrats only grasped the issue post-election. They rushed responses but missed opportunities due to excessive caution. Elizabeth Warren’s influence frustrated many—her hardline stance nearly dictated party policy. Internal divisions sparked widespread anger.
Meanwhile, Republicans seized the moment. Trump raised massive funds from the crypto community; tech shifted toward GOP. After the election, I spoke with Democrats—they admitted their anti-crypto stance likely cost voter support. They don’t want to repeat that. So forward-thinking members proposed: instead of endless debate, pass both bills and remove crypto from the political agenda. That way, they avoid further controversy, even if they don’t fully win.
Has Anti-Crypto Sentiment Disappeared?
Ryan:
So you’re saying Democrats no longer oppose crypto? Has the anti-crypto faction vanished? Is it over?
Mike:
Pretty much. But go ask someone in D.C. about blockchain and have them explain it. Honestly, how many crypto apps are on your phone?
Yet most of these apps just let you buy/sell prices. They don’t let you pay for tickets, hail Uber, or do everyday American things. So, for most Americans, crypto still feels like a speculative casino—nothing more. Politicians reflect that.
As an industry, we now need to realize crypto’s potential. We must build decentralized systems and accelerate asset tokenization. I believe we’ll eventually see bank accounts, checking accounts, even brokerage accounts as crypto wallets. Only then will crypto deliver real utility to the American public.
But insiders keep claiming "we’re so important." Honestly, if I hear one more speech like that, I’ll lose it. Yes, Bitcoin matters—undeniably. But we can’t limit ourselves to a "Bitcoin industry," right? We’re a digital asset and crypto industry. Beyond Bitcoin and stablecoins serving overseas users—when was the last time you bought something with a stablecoin? Often? Probably not. So far, apart from gambling and investing, crypto hasn’t touched most people’s lives.
Regulation hasn’t allowed it—but that’s our huge opportunity. Now we have fast enough blockchain technology, and a regulatory environment that’s both lenient and clear. Both are vital and complementary. The new SEC welcomes crypto; the old SEC didn’t. They opposed, suppressed, sued. Now, the SEC is open—this change creates fertile ground for innovation, letting people test bold new ideas.
The U.S. Consumer Crypto Market
Ryan:
I hadn’t studied the GENIUS Act closely until now, but we know it’s likely to pass. Can you briefly explain what it does? Right now, $250 billion in stablecoins exist on blockchains—could grow to $2 trillion. What changes does the GENIUS Act bring? Does it pave the way for the U.S. to promote crypto and the dollar globally? How big is its potential?
Mike:
This could be a pivotal turning point. We need payment companies involved—Stripe, Visa, Mastercard. You use Apple Pay at McDonald’s now—imagine paying with stablecoins. This requires deep collaboration between payment firms and tech platforms. Stripe, Visa, Mastercard could dominate this ecosystem. Why does it matter? Because Bessent and others say America needs to raise $35 trillion. We want global users to hold their digital currency in dollars, not other currencies. This proves dollar strength and attracts overseas capital to cover U.S. deficits.
More exciting: once stablecoins are legalized, businesses can use them without legal fear. For Tether, the bill sets a compliance deadline—two years, three, or 18 months? The exact length may spark debate, but Tether’s team is experienced—they’ll figure it out regardless.
But the bill blocks non-financial firms—like Facebook (Meta) and X (formerly Twitter)—from issuing their own stablecoins. Banks are sensitive, especially community banks—similar to Walmart’s long-stalled bank ambitions. Banks fear non-financial entrants could disrupt traditional banking. I’m sure Meta is furious.
They can’t issue their own, but can use others’ stablecoins. Still, I expect massive capital flows. We haven’t even seen IoT and micro-payments explode—many companies feared unclear regulation. Now, with the bill passing, these areas gain momentum.
Another debate: should stablecoins earn interest? Banks broadly oppose this—interest-bearing stablecoins could trigger bank runs, especially hurting community banks. If anything threatens the bill, it’s bank opposition.
Could State Street issue both money market funds and stablecoins, letting users switch freely in wallets? Sounds like interest-bearing stablecoins. Hypothetical, but such products may emerge. Chad Pasquale already launched offshore yield-bearing stablecoins. These could become as common as ETFs—part of daily life.
Tokenizing Galaxy Assets on Ethereum
David:
Stablecoin tokenization is fascinating. I know it sounds exciting. Galaxy plans to list on Nasdaq—but why Nasdaq? Why trade there? Because the U.S. has long been the global capital hub. But recently, bond markets weakened, Treasury sales disappointed. Interest in America as the capital center seems fading. Capital and bonds are flowing elsewhere—toward internet capital markets. That’s where stablecoin tokenization happens—on Ethereum’s Layer 1.
If Nasdaq or America’s financial dominance fades, Mike, when will you consider tokenizing Galaxy’s assets on Ethereum?
Mike:
We’ll do it as soon as possible. We’re now working with the SEC—may tokenize Galaxy stock soon as a first step. I believe we’ll see innovations in equity tokenization, like perpetual equity contracts. These could reshape the industry. Now the SEC encourages experimentation—companies feel bolder, less afraid of legal risks or crackdowns.
David:
How’s the SEC collaboration going? Is it effective?
Mike:
Very effective—night and day from before. I expect exciting progress later this year. Markets may benefit fully next year. We must watch capital flows—unclear yet which areas will gain most. But definitely, blockchain activity will grow.
Last night, I dined with brilliant, influential industry figures—discussed many issues. You realize how complex market structure is. Which blockchains suit stablecoins? Is a simple database enough? How decentralized must a chain be? These are crucial, though I hadn’t grasped them before. A major European multinational already set rules on this—everyone at dinner agreed they were reasonable, though I haven’t studied them deeply.
There are choices: Is Tron suitable? Ripple? Must it be Ethereum? Should governments decide which blockchains run stablecoins? Or should buyers assume risk? These spark passionate debates on safety and safeguards. We haven’t solved everything, but I believe we’ll find answers.
A Roadmap from the SEC Ahead?
Ryan:
I’m optimistic about the SEC—something I never felt in the past four years. Previously, it was the opposite. But now it’s not just because Gensler left. The new SEC, under Hester Peirce, seems to drive real progress. Paul Atkins’ tweets and speeches inspire me—he compares traditional markets to fax machines and crypto/blockchain to the internet. He stresses we must tokenize securities in this "internet era" of new tech.
I don’t know if their public statements match your actual SEC collaboration experience, but do you think the SEC might release a full roadmap in the next 1–2 years—guiding how to put securities and U.S. stocks on-chain? Could this let us not just tokenize Galaxy, but build a full on-chain market and ecosystem?
Mike:
Yes, think of decentralized platforms like Hyperliquid and Uniswap—how fast they grow. If Uniswap lets token holders truly share business profits, why wouldn’t more liquidity flow there?
So, I believe liquidity will shift first. Once Apple stock is tokenized, you’ll see 24/7 trading, and people previously excluded can participate. It may start slow, then accelerate fast. Current tokenization projects face tech bottlenecks. But as more operations move to blockchain instead of legacy ledgers, efficiency will soar. I don’t know the exact timing, but when it hits, we’ll see a "Cambrian explosion" of industry transformation.
Ryan:
To clarify, the main barriers to security tokenization are the need for a market structure bill and SEC approval. Both are essential, correct?
Mike:
Also, clarity on where these tokenized securities can trade. Currently, they must trade on regulated platforms called ATS (Alternative Trading Systems). Republic Crypto has one—or planned to acquire one before rules changed. Now, the SEC is discussing rapid rule adjustments. So we’re not fully there yet, but getting closer.
The Year of Crypto IPOs?
Ryan:
We seem close to seeing crypto IPOs. Galaxy listed on Nasdaq—do you expect more this year? Will 2025 be the year of the crypto IPO?
Mike:
I think a wave of crypto IPOs will happen this year. Kraken is considering one. Many crypto firms are evaluating the opportunity.
Ryan:
This further legitimizes crypto, right? It draws Wall Street attention—investors can buy in. Even Coinbase recently earned S&P recognition—huge legitimacy boost, making crypto undeniable. What about fundraising?
Mike:
Crypto is far more legitimate than before. The community may dislike admitting it, but real legitimacy comes from shifting from a "casino" to a service provider. I want more functional crypto apps on my phone—not just buy, stake, sell. In the U.S., we lack payment functionality. So far, crypto mainly helped ordinary people via Bitcoin as savings or cross-border payments abroad—especially in Latin America, a big issue. We invested in three or four VC firms profiting this way. I don’t underestimate achievements, but we need an "aha moment" for average Americans to grasp crypto’s value. That moment may come with tokenized stocks.
Traditional Finance Declines, Crypto Rises
Ryan:
Let’s talk about saturation in traditional finance. You said we pushed crypto like rolling a snowball uphill, but with Larry Fink joining, everything changed—we now have more backing.
Has traditional finance basically accepted crypto? Are institutional investors shifting en masse, or do we still face hurdles convincing them that crypto and blockchain are the future?
Mike:
Undoubtedly, traditional finance is more open to crypto than before, though they move slowly—unfairly so. Still, crypto’s size isn’t big enough to worry a U.S. bank CEO yet.
I believe what will truly grab Wall Street’s attention is tokenized stocks. When traditional finance’s "darlings" get tokenized and traded, every asset becomes critical—people will realize: "I must move from the old era to the new." But I don’t think it’ll be Bitcoin. Even as Bitcoin trades, it may act more like gold. Big firms have gold desks, but gold isn’t core to their business. Crypto must transcend single assets to truly impact the entire financial system.
The Terra Luna Case
David:
I wanted to ask about the Terra Luna settlement—surprisingly little discussion outside Galaxy. News says Galaxy was fined $200 million for supporting Luna while selling it. Please share your feelings about the event, internal discussions, and lessons learned.
Mike:
I must clarify: when settling with any agency—especially the NY Attorney General—you sign an AOD (Assurance of Discontinuance), neither admitting nor denying allegations. So we can’t discuss details. I can say receiving that call wasn’t pleasant. I was surprised it dragged on so long and happened at such a bad time—I saw a new government offering clearer prospects. We also planned to go public. Just after listing, we might work with bankers to raise capital—bankers who only support you when you’re financially healthy. Given all that, though I had a fighting instinct, moving on was wiser. As traders, we treat bad trades like goldfish—forget quickly, move on. So I didn’t dwell. It was a painful settlement, but two days after it closed, I stopped thinking about it. Our motto: don’t talk about it, keep doing business in NYC, keep living.
Ryan:
I think a lesson for the whole industry is how risky algorithmic stablecoins are, right? They can spiral out of control fast. Actually, I imagine different scenarios.
Mike:
Yes, there are many ecosystems. I discuss market structure, but we must label things carefully. I never thought algorithmic stablecoins should be called "stablecoins." A bank run partly caused that ecosystem’s collapse. Nomenclature matters.
Recall Celsius, BlockFi, Voyager. I believe they disclosed, but most thought they were depositing—assuming protection. Actually, they invested in leveraged hedge funds with mismatched assets/liabilities. So I hope Washington delivers shorter, stronger disclosures—clearly stating what products actually offer. When did you last see such disclosure? Never. None of us did.
Like cigarette labels: "May cause cancer"—simple. Is it government-guaranteed or not? Are you taking our credit risk or not?
There should be a "dumb-proof" disclosure. In our industry—especially with many novice investors lacking experience and lots of hype—we need it. I know Paul Atkins values disclosure highly. If I were with him now, I’d suggest creating a "dumb-proof" disclosure.
Ryan:
Is this part of the Genius Act? Does the Genius Act define stablecoins as requiring full backing—like Treasuries—not things like Terra Luna?
Mike:
Exactly. I don’t have precise details, but I believe it’s 40-day NT bills or U.S. Treasury deposits.
Galaxy and Crypto’s Future
Ryan:
This will help standardize definitions, right? Passing such legislation in 2022 might’ve been beneficial. About Galaxy—you’re doing cool things combining crypto and AI. I hadn’t focused on it, but preparing for this talk, I learned you bought a Texas Bitcoin mining facility in December 2022—Helius, 160 acres.
Mike, it looks like Galaxy plans to use this for AI, building an AI cloud. What are your plans? Will there be more such mining sites?
Mike:
Galaxy is a holding company with two independent businesses. One is the crypto side we discussed; the other is our data center business. We’ve signed at least one similar lease agreement, generating $14 billion in rent over 15 years—just a third of current capacity. So it’s huge: $6 billion in construction, $6–8 billion in equipment. A $14 billion capex project, to finish in Texas within two years.
You must deliver on time and budget. Such scale taught me about magnitude. If we fully build out, current capacity is 800MW—we believe we can expand to 1600MW, totaling 2600MW—possibly among the largest U.S. data centers, in a remote area. That’s a $70 billion capex project.
$70 billion—Uruguay’s GDP—to build a massive computing hub. This shows how staggering investments in AI’s future are by Microsoft, Google, OpenAI, Tesla, Amazon. We must think non-linearly, but our minds aren’t adapted. Think of your parents’ car vs. yours.
We grow incrementally. Our brains aren’t used to such leaps. So this is a brave new world. Honestly, seeing people invest so massively makes it feel real. It’s a solid business—predictable. Of course, risks exist. We must build on time, deliver, operate good data centers. We’re becoming real estate developers. For over a decade, half my balance sheet operated in extreme volatility.
Yes, having stable high cash flow plus the crypto business on the other side is great. And crypto itself has huge potential—could evolve into a great business.
We don’t know how tokenization will unfold or where value will come from. But we know—or at least believe—Bitcoin will appreciate. So you don’t hold massive Bitcoin, but I wouldn’t just hoard it either.
For me, the fun in crypto is whether we can create a decentralized revolution? Can we tokenize everything and deliver financial and monetary democracy? We’re at the starting line.
David:
The starting point of crypto is data centers, right? It began with Bitcoin miners professionalizing—the first large-scale business in crypto. Actually, crypto and AI developed almost simultaneously—the driving force behind both being data.
Looking ahead, is there a deep connection between AI and blockchain industries? Or is it merely historical coincidence?
Mike:
Yes, data centers emerged as historical coincidence—lucky. Bitcoin miners had grand visions, as do we. But this industry consumes massive power—we’re among the few players with access to vast power. People ask why other big data center firms haven’t entered? Simple: they lack power access. When I entered, we already had the world’s largest data center—800MW. No one had built such a giant before. So whoever secures power contracts dominates.
David:
Do you see convergence between AI and blockchain tech in the future?
Mike:
I believe there will be convergence. Blockchain is decentralizing; AI is a powerful centralizing force. There will be friction between them. For example, your AI agent might soon buy daily essentials through channels likely based on crypto tech. In our VC arm, we’ve invested in firms aiming to become such channels—transferring stablecoins via their tokens. Specialized AI blockchains may even emerge. So I believe AI and crypto will generate many synergies.
About data centers—their rise is mainly due to our power access. So I don’t conflate AI and crypto, but their link is a fascinating story. I keep trying to collide them, finding new possibilities. For example, who are our tenants? Google, Microsoft, OpenAI, Tesla—companies driving AI. Working with them puts us at AI’s core—not just calling Jeff Bezos to ask what he’s doing. Collaboration helps commercially and intellectually, keeping us at the frontier.
Building and Scaling Data Centers
Ryan:
Data center business is fascinating. It feels very "physical," but ten years ago, I might’ve seen it as basic infrastructure. Now, its importance has risen to geopolitical levels—especially in the U.S.-China AI race. The key question: can we build and scale data centers faster than China or other rivals? Can we secure energy more efficiently?
Mike:
In Texas, it’s not hard—that’s why many data centers locate there. An Emirati data center executive once said: Einstein’s E=mc² can now be read as E=I—energy equals intelligence. True. More power, more intelligence. Power demand now far exceeds supply—because power drives intelligence creation. Zuckerberg said in an interview that he used to predict trends, but now he can’t—everything grows exponentially. I believe we’ll see a sustained bull market for at least the next three to four years.
Ryan:
Do you think the U.S. can maintain its lead over China in energy and data?
Mike:
I’m no expert, but I always believe in America. We make mistakes, but we find ways to fix them. I recently read that 36% of Nobel laureates and scientists are immigrants, and 50% of unicorn CEOs are immigrants. As long as we keep talent flowing freely, protect our education system, and avoid politicizing academia, I believe America will stay ahead in AI.
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