Crypto is no longer just an asset class, it is also an ever-more critical part of financial infrastructure, says Steve Kurz, Galaxy Digital’s (GLXY) global head of asset management and co-head of digital assets

In “The Great Convergence,” the company’s 2026 investment outlook, Kurz sets out a plan that’s pragmatic about what can be done now while staying optimistic about the big picture in the long run.

The defining story of this cycle, he argues, is the asset-to-infrastructure transformation.

“The convergence of traditional financial rails with crypto infrastructure represents a significant and durable market structure evolution for global financial services,” Kurz told CoinDesk in an interview.

Galaxy Digital, a digital asset financial services and investment firm 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 “a lot of cycles are sitting on top of each other.”

While crypto token prices have pulled back substantially, he stresses that the levels reached are now below those at which many fundamentally positive developments have occurred. That disconnect makes it “pretty hard not to scratch your head.”

In his view, the dominant force behind recent price weakness has been the liquidity and leverage cycle.

While the October liquidity event and subsequent deleveraging weighed heavily on markets, it 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 selloff, he argues, was “a regular wave of deleveraging,” not a systemic breakdown in the back end of the system.

Infrastructure is growing rapidly, and prices usually respond only after tangible increases in activity and adoption, rather than beforehand, he said. When onchain activity and engagement rise again, the story will coalesce around it.

He allows that “there’s always a possibility of a leg down,” but said most of the dramatic selling has probably already occurred. Enough pain has been absorbed that consolidation, range-bound trading or a gradual grind higher are more likely than a V-shaped recovery. His base case is several months of consolidation followed by a firmer move into the second half.

A new regime: crypto on a bigger dashboard

At the center of his thesis: Crypto’s integration into Wall Street’s plumbing. With new connections to traditional finance, crypto is now on a much bigger dashboard of global assets, a position that comes with trade-offs.

Capital now flows across a broader opportunity set, and crypto competes more directly with established assets like gold or emerging themes such as quantum technology. The bar for attracting global capital is higher.

According to Kurz, that’s evidence of maturity. The relationship between crypto and traditional finance is still immature, but is deepening. Public blockchains are increasingly viewed as institutional-grade infrastructure. Stablecoins and tokenization are reshaping payments and market structure. The tentacles of crypto infrastructure are spreading across 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 advancing. And while that may not immediately translate into price appreciation in the short term, it is foundationally important for the long-term value of both the technology and the assets built on top of it.

The fusion of asset and technology

Key to the “Great Convergence” is the fusion of crypto as an asset class with crypto as a technology stack. That integration is driving the creation of a larger, more robust onchain economy.

Galaxy remains focused on crypto-native assets and believes the long-term bridge being built between infrastructure and capital markets is highly likely to play out. Kurz is clear: This is not a short-term “buy the dip” trade; it is a multiyear structural shift.

Sentiment, risks, and the bottoming process

Kurz notes that the spread between price, sentiment and underlying business activity has “never been wider.” While market prices have struggled, business activity, particularly on the infrastructure side, remains strong. That divergence gives Galaxy conviction.

He downplays existential fears, such as quantum computing, as immediate threats to crypto’s viability. More broadly, he observes that periods of intense negativity often coincide with market bottoms. At the same time, he identifies a subtler risk: apathy. A loss of relevance in the broader market conversation would be more concerning than volatility itself.

Bitcoin BTC$69,210.75, in his experience, often acts as a “canary in the coal mine.” Historically, it has been adept at sniffing out macro risk moves before other markets react. It’s possible, he suggests, that BTC sensed broader risk-off conditions and absorbed the pain first. That dynamic can work in both directions.

Having “lived with bitcoin enough,” Kurz believes it can be assessed through a cyclical macro lens. Crypto no longer trades in isolation; it is increasingly intertwined with broader liquidity and risk cycles.

Galaxy’s performance and strategic positioning

Against this backdrop, Galaxy sees strong momentum in its core businesses, particularly infrastructure and asset management. As of the end of last year, Galaxy had $12 billion in assets on its platform.

On the infrastructure side, Galaxy is doing more than it was 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.

As for asset management, Galaxy is expanding its offerings, including the introduction of a fintech hedge fund designed for wealth and high-net-worth channels.

The disruption of financial services market structure represents a “Fintech 2.0” moment and creates both public and private-market investment opportunities, according to Kurz.

“Galaxy’s Fintech Fund will focus on the public markets winners and losers of the great convergence, while Galaxy Ventures will continue to invest in early-stage companies around the globe that are building high quality, crypto-enabled 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 fresh capital allocation decisions. Galaxy reports winning business across banks, wealth intermediaries and institutional asset owners, facilitating inward capital flows even during a consolidation phase.

Institutional assets under management (AUM) remains a key focus, and the firm is seeing growing engagement from large clients. The gap between subdued prices and steady institutional interest reinforces Galaxy’s long-term thesis.

Owning the great convergence

Ultimately, Kurz frames Galaxy’s strategy as “owning the whole story of the great convergence,” from crypto rails and onchain infrastructure all the way to public markets and asset management.

The firm is positioning itself across the stack, capturing both the technological integration of crypto into traditional finance and the financialization of crypto assets.

For 2026, the outlook is measured, constructive. Don’t expect a V-shaped recovery. Expect consolidation, maturation, continued infrastructure buildout. Expect crypto to compete on a broader stage for global capital. And expect the narrative to catch up to the activity once it turns.

In Kurz’s view, the plumbing is being laid for a larger, more durable onchain economy. Prices may lag in the near term, but the long-term fusion of asset and technology leaves him structurally bullish on digital assets, and confident in Galaxy’s role at the center of that convergence.

Read more: Deutsche Bank says bitcoin’s selloff signals a loss of conviction, not a broken market