- Mike Novogratz warns community-driven tokens must prove real-world utility
- XRP and Cardano may lag unless usage and fundamentals improve
- Business-driven tokens with revenue models are likely to outperform
Galaxy Digital CEO Mike Novogratz has delivered a blunt assessment of where the crypto market is heading, warning that community-driven tokens like XRP and Cardano (ADA) may struggle in future cycles unless they prove real-world utility. Speaking with Galaxy’s Head of Firmwide Research Alex Thorn, Novogratz outlined how the market is shifting away from hype-based valuations toward tokens backed by measurable business fundamentals.
Community Loyalty Is No Longer Enough
According to Novogratz, the crypto landscape is becoming far more competitive with each cycle. As new blockchains, platforms, and token models emerge, it is increasingly difficult for projects to rely solely on loyal communities to sustain value. Tokens that function primarily on narrative and long-term holders may lag behind rivals that generate revenue or enable real economic activity.
He framed the shift clearly, arguing that once a token is not money, it effectively becomes a business, and businesses are valued very differently. In his view, Bitcoin has cemented its role as money, while most other tokens must justify their valuation through earnings, usage, or clear economic output.
XRP and Cardano Under the Microscope
Novogratz directly questioned whether Ripple and Cardano can maintain their positions as the market matures. He acknowledged the strength of their communities, but suggested that community alone may not be enough in a market with expanding options.
Using Cardano as an example, he pointed out that despite years of development and a dedicated following, onchain usage remains relatively limited compared to newer platforms. He raised similar concerns around XRP, asking whether these ecosystems can continue to hold together if capital increasingly flows toward platforms with stronger fundamentals.
Hyperliquid Shows the Model Novogratz Favors
As a contrast, Novogratz highlighted Hyperliquid as an example of where he believes the future of tokens is heading. The exchange burns roughly 98% of its profits by buying back and destroying tokens, creating what he described as an equity-like structure. This model directly ties token value to business performance, rather than sentiment alone.
He argued that tokens structured around cash flows, buybacks, or clear economic incentives are more likely to trade like real-world assets, rewarding usage and profitability rather than speculation.
A Multi-Year Transformation Ahead
Looking forward, Novogratz expects the crypto industry to undergo a one-to-three-year transformation. During this period, wallets and exchanges could evolve into full-scale neobanks, offering stablecoins, tokenized equities, money market products, and broader financial services. In that environment, only tokens with clear utility or revenue alignment may thrive.
For XRP and Cardano, the message is clear: loyalty has carried them far, but the next phase of crypto may demand more than belief.
