## Against the backdrop of a dark market environment: why crypto companies are still tied to Bitcoin

The cryptocurrency industry, despite widespread expectations of diversification, remains captivated by Bitcoin's value proposition. These observations were shared by Michael Novogratz, founder of Galaxy Digital, in his recent analysis of the sector's current state.

### Unbreakable dependence on price fluctuations

Against the dark background of the investment cycle, the structural problem of the crypto industry becomes increasingly evident: most business models in this sector are directly linked to the dynamics of digital asset prices. Novogratz emphasized that even companies claiming broad diversification of their income cannot fully avoid the impact of Bitcoin's price swings.

“If Bitcoin drops by 30%, your profits will decrease by 30%,” he noted, referring to areas such as asset management, staking, and trading operations. In these models, profitability is calculated as a percentage of the underlying asset's value, making the entire revenue stream dependent on market decisions.

### Why fluctuations affect everything

The economic incentive system in the crypto space is built so that the price acts as the primary multiplier for all other metrics. Even if a crypto firm does not hold tokens on its balance sheet, it would still suffer from price declines: staking fees decrease along with project capitalization, trading activity slows down, and asset management fees shrink proportionally to valuations.

Novogratz contrasted this correlation with traditional financial institutions, which distribute income streams across several stable channels. In his view, the crypto industry remains mono-focused, which exposes it to risk.

### Infrastructure as a buffer against price shocks

Galaxy Digital is seeking to go beyond this dependence by expanding into data centers and infrastructure. Novogratz revealed that the company's infrastructure business is currently competing in importance with traditional crypto activities, and in some aspects, it may even surpass them in terms of market capitalization.

Since infrastructure services are subject to different development cycles and have distinct capital investment requirements, Novogratz suggested that Galaxy might split into two separate entities in the future. However, this decision is still under consideration.

### Breakthrough may come from an unexpected side

Against the backdrop of the current price dynamics, where many digital assets lag behind precious metals and other risky assets, Novogratz remains constructively optimistic. He expects easing of monetary policy, including a rate cut by the Federal Reserve System of the USA.

According to his analysis, a weakening US dollar could create a favorable environment for restoring investor appetite for alternative assets. Bitcoin and the crypto sector, remaining suppressed compared to gold and silver, could suddenly flourish when the momentum returns.

“An unpleasant surprise could be that crypto rises significantly more than anyone expects,” Novogratz suggested, emphasizing that a clear breakout above critical support levels could fundamentally change market sentiment.

### Outlook for 2026

Novogratz considers the overall outlook for 2026 to be promising, especially with increasing investments in crypto infrastructure. He believes that although crypto companies remain tied to Bitcoin's dynamics, (as of current data, BTC is trading at $90.65K with a decrease of 0.31% over 24 hours), this dependence will gradually weaken.

Scaling infrastructure projects and diversifying sources of income should become key factors in breaking the cyclical link. Although in the short term, amid dark market fluctuations, this may seem unattainable, the long-term development trajectory of the industry indicates the possibility of gradually disentangling this dependency node.