Galaxy Digital: “The recent pullback is a healthy deleveraging…We see a gradual recovery rather than a V-shaped rebound”

The recent decline in digital asset (crypto) prices is not a structural breakdown but a process of unwinding liquidity and leverage, and a gradual rise after a period of range-bound trading is more likely than a short-term sharp rebound, according to an assessment.

According to digital-asset media outlet CoinDesk on the 15th, Steve Kurz, head of asset management at Galaxy Digital, said in an interview that “this downturn is not a collapse in the system’s plumbing, but a routine wave of deleveraging, fundamentally different from 2022 (the bear market).”

He said, “In 2022, vulnerabilities in market structure were exposed, but now more sophisticated risk-management frameworks and financial infrastructure are in place,” adding that “the recent pullback is closer to a healthy correction.” He also noted, “Most of the dramatic selling has likely already occurred.”

However, he ruled out the likelihood of a near-term sharp rebound. Kurz said, “I’m not expecting a V-shaped recovery,” adding that “after several months of range-bound moves, a more resilient trend is likely to emerge.”

He also stressed structural changes in digital assets. “The convergence of traditional financial rails and digital-asset infrastructure is a major evolution in the architecture of global financial services,” he said, adding that “digital assets are no longer merely an asset class; they are becoming a core component of financial infrastructure.”

On stablecoins and tokenization, he explained that they are “reshaping payments and market structure,” and said that “public blockchains are increasingly being recognized as institutional-grade infrastructure.” He described this as a “bull market in digital-asset infrastructure,” emphasizing that “even if prices don’t respond immediately, infrastructure accumulation is very important over the long term.”

Regarding the market environment, he said multiple cycles are overlapping at once. “Prices have been heavily corrected, but they’re trading in a zone even lower than the levels at which positive fundamental changes were emerging,” he said, adding, “This disconnect is hard to explain.”

He also commented on Bitcoin’s role. Kurz said, “Bitcoin has often been the first to sense macro risks,” adding that it “may have been the first to reflect the risk-off flow.” He continued, “Digital assets no longer move independently; they are becoming increasingly tightly linked to broad liquidity and risk cycles.”

On market sentiment, he said “the gap between price, investor sentiment, and real business activity is larger than ever.” He added, “More concerning than strong negativity is indifference,” saying that “a diminishing presence in market conversations could be a bigger risk.”

Galaxy manages about $12 billion in assets on its platform as of the end of last year. Kurz said, “We are seeing continued inflows of capital from banks, asset managers, and institutional investors,” adding that “institutional participation is continuing even during this correction.”

He said, “This change is not a short-term dip-buying opportunity but a structural transition over several years,” adding that “the convergence of digital assets and traditional finance will continue.”