Galaxy CEO Warns: Crypto Treasury Firms May Have Hit Their Peak

Crypto's golden geese are running out of eggs—at least according to Galaxy Digital's CEO.

The once-booming crypto treasury management sector might've already peaked, with institutional players now scrambling to justify their fees as yields compress. Sound familiar? *Cough* traditional finance *cough*.

Active capital deployment is drying up faster than a meme coin’s liquidity pool. Firms that rode the 2021-2023 wave now face brutal Darwinism: adapt or become blockchain relics.

One hedge fund manager quipped, 'Treasury services went from printing money to printing PowerPoints.' Ouch.

“Peak Treasury Issuance” May Be Over

Speaking during Galaxy Digital’s second-quarter earnings call, Novogratz said that the trend of companies being formed primarily to hold digital assets—particularly Bitcoin—has likely plateaued.

“We’ve probably gone through peak treasury company issuance,” Novogratz remarked. “The question now is which of the existing companies will become monsters.”

This insight marks a significant moment for the industry. Over the past few years, the model of treasury companies holding Bitcoin as a hedge against inflation or as a growth strategy—popularized by MicroStrategy—has attracted headlines and investor interest. Yet now, Novogratz suggests, the market is entering a more competitive and selective phase.

Ethereum Treasury Firms Gaining Momentum

While Bitcoin-holding firms may be peaking, Ethereum appears to be gaining favor. Novogratz pointed to two standout Ethereum-based treasury companies—BitMine, founded by Tom Lee, and SharpLink, backed by Ethereum co-founder Joe Lubin. Both firms are expected to continue growing.

However, he added a cautionary note for newcomers. “New entrants may have a harder time getting oxygen,” Novogratz warned, highlighting the challenges of standing out in an increasingly saturated space.

Galaxy’s Role in the Treasury Ecosystem

Galaxy Digital remains deeply embedded in the crypto treasury landscape. The firm collaborates with more than 20 companies that hold digital assets in treasury, offering management and advisory services.

These partnerships have brought about $2 billion in digital assets onto Galaxy’s platform. Novogratz emphasized the benefits of such recurring income, calling it a source of stability and long-term growth.

“This generates recurring income that will go on and on,” he said.

Galaxy has helped facilitate several large-scale transactions for treasury clients. In fact, Novogratz revealed that the firm had recently executed what he described as one of the largest bitcoin trades in history, valued at over $9 billion. The trade not only reinforced Galaxy’s reputation in the market but also showcased its operational strength and client trust.

July: A Record Month

Reflecting on recent performance, Novogratz noted that July 2025 was the strongest month ever for Galaxy Digital across all business segments. This includes trading, asset management, and infrastructure solutions, underscoring the firm’s diversified strength in a volatile market.

Tokenized Stock Offering on the Horizon

In line with its innovation-first approach, Galaxy has filed plans to issue tokenized versions of its GLXY Class A common stock. The filing covers up to 245 million shares, which will be made available for resale by existing shareholders.

These tokenized shares will offer investors exposure to Galaxy’s equity through blockchain-based financial instruments, signaling a shift towards more accessible and modern capital markets. The firm’s shares are currently traded on both the Nasdaq and Toronto Stock Exchange under the ticker GLXY.

Q2 Financial Performance: Solid but Below Expectations

Galaxy Digital posted a net income of $30.7 million for Q2 2025. While the performance was strong in several areas, it still fell short of analyst expectations, resulting in a 7% drop in share value after the earnings report.

The company’s Q2 report also revealed some major developments in its crypto portfolio:

• Bitcoin Holdings: Galaxy increased its Bitcoin stash by 4,272 BTC, bringing the total to 17,102 BTC by June 30.

• Ethereum Holdings: In contrast, the firm reduced its Ethereum exposure, continuing a broader portfolio rebalancing strategy.

• XRP Holdings: Galaxy held $15 million worth of XRP, demonstrating interest in diversifying within major digital assets.

• Cash and Stablecoins: The firm also held $1.2 billion in cash and stablecoins, providing ample liquidity.

• Shareholders’ Equity: Reported at $2.6 billion.

Additionally, Galaxy completed the sale of over 80,000 Bitcoins on behalf of clients during the quarter, reflecting high trading activity and institutional demand.

Future Outlook: Strategic Depth Over Quantity

As the crypto sector matures, the emphasis appears to be shifting from accumulation to strategic depth. For firms that already hold substantial digital assets, success will now depend on how well they manage, grow, and utilize those holdings.

Novogratz’s remarks serve as a reminder that the next phase of crypto adoption will be defined not just by holding crypto, but by how it’s deployed, managed, and integrated into broader business strategies.