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Throughout its history Bitcoin and other cryptocurrencies have experienced significant price fluctuations, whether due to larger macroeconomic factors impacting all asset classes or during the “crypto winter” that has been linked to industry concerns.
But with a crypto-friendly Trump administration and expectations of passage of a law regulating the structure of the cryptocurrency market, many observers expected another upswing in digital assets to begin in 2026. However, the exact opposite was the case. Bitcoin has fallen more than 21% so far this year, falling to $60,062.00 last week – its lowest level in about 16 months. This represents a decrease of almost 50% compared to the record level in October 2025.
What is the cause of this recent decline? Galaxy founder and CEO Mike Novogratz said at the CNBC Digital Finance Forum in New York on Tuesday that this was not a single event but a reflection of a larger shift in the industry. When Bitcoin fell 22% in less than a day in November 2022 following FTX’s collapse, there was a “loss of confidence,” Novogratz told CNBC’s MacKenzie Sigalos at the event. “This time there is no decisive evidence,” he said. “You look around, what happened?”
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Bitcoin price since the beginning of 2026
Novogratz called the October 2025 wipeout a significant event in which more than 1.6 million traders suffered a total loss of $19.37 billion in leveraged positions in 24 hours, a situation that he said “wiped out many retail traders and market makers” and put significant pressure on prices.
“Cryptocurrency is all about narratives, it’s about stories,” he said. “These stories take a while to build and you attract people…so if you take out a lot of these people, Humpty Dumpty won’t be put back together right away,” he said.
But Novogratz also expects something more lasting to emerge from the current downturn, saying that the latest era of crypto investing, the “age of speculation,” will fade out in the future as the crypto industry has “created institutions where people have a different risk tolerance.”
“Retail people don’t get into cryptocurrencies because they want to make 11% on an annual basis,” he said. “They get in because they want to do 30 to one, eight to one, 10 to one.”
Some traders will always speculate, says Novogratz, but overall “it will be implemented or replaced by using the same rails, these crypto rails, to introduce banking.” [and] Financial services for the whole world. So they will be real assets with much lower returns.”
He also noted that tokenized stocks are assets that have “a different return profile.”
Sigalos asked Novogratz whether the eventual passage of the CLARITY Act could be a catalyst for the industry, as the stalling of crypto market structure law momentum on Capitol Hill represents at least a short-term headwind. He is confident that a bill on the structure of the crypto market will eventually come into force.
“I spoke to [Senate Minority Leader] “Chuck Schumer said two nights ago, ‘We’re going to pass the damn CLARITY Act,'” Novogratz said. “The Democrats want to pass the bill and the Republicans want it.”
Novogratz said the crypto industry needs the bill for “many reasons,” but most importantly: “We need it to get the crypto market going again.”
