Prof G Markets - Mike Novogratz: Crypto's Investors Have Moved On

Episode Date: July 17, 2026

Ed Elson and Scott Galloway are joined by Mike Novogratz to discuss why crypto has struggled this year and where he thinks the industry goes from here. They also explore how he got into the AI infrastructure business, why he now considers himself an AI landlord, and whether the AI boom is headed toward a demand crisis. Mike Novogratz is the founder and CEO of Galaxy Digital. Subscribe to the Prof G Markets Youtube Channel  Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Has Michael Symbolist forgiven us yet? I'm not going to answer that question. You know why? Because I love the dad jokes. I don't want them to ever end. I know you're into the dirty stuff, but like just objectively, the dad jokes are very, very strong.

By the way, did you see my new shades, my new peepers? Look at these. Wow, yeah. You know where I am, right? You know what's going on here. where you are, but maybe our audience doesn't. Where are you? I don't like to be a share, and I don't want to talk about my kids without their permission.

I'm in Charlottesville, and I'm at orientation, which is fucking ridiculous that I'm even here. I woke up yesterday, got to have breakfast with my son, despite that, you know, how uncool he must have felt having breakfast with me. And then he basically told me that it wasn't really necessary that it dropped him off at his dorm where he was spending a night. But I'm like, no, I'm coming to your dorm with you. I'm up to fucking. and oh, dark, hundred hours. And so we go to his dorm, hauling comforters, and there's all these nervous-looking parents with their,

they're like, you know, Sherpas and people bringing shit for one night in the dorms. And I'm not exaggerating. We barely walked in. He turns around and hugs me and practically body blocks me out of the room. And I'm taking my revenge. I picked up these bad boys at registration, and I've been wearing them. I wore them out last night. So I came down here thinking, and I said to him, I apologize, but during the middle of the day, I'll have like two or three hours of podcast.

I haven't seen him since 8 a.m. yesterday. He hasn't. Like, he texted me late night last night. I called him. I'm like, we're getting together? What's the deal? We get him dinner. And he wrote back, is it important?

That's what I've gotten back. And I'm like, no. And he goes, I'll call you later tonight. Didn't call me. Anyway, so I'm in Charlottesville. What are you doing it? That's amazing. It sounds like you have an amazing time.

Just to clarify, does he? have activities that he has to attend to? Like, is he, like, meeting all his friends? Because in that case, I give him a pause because he needs to kind of focus on socializing, being cool, et cetera. Is that what's going on? Or is he just, you know, chilling without you? No, he's busy. And what you realize, and you have a long time to prepare for this emotional trauma, but you have these mixed emotions of, we've clearly done something right. He's at launch. You don't want a kid clinging to you and worried and calling you and anxious. So we've done something right, but you can't help it.

You also, you're just really sad. You want your little boy back. I mean, it is a very emotional time. But he's busy. So I'm trying to continue talking so I don't get emotional. He's busy, but the parents' calendar, they have, all day they have schedules for us. We should not be here. Let me summarize everything I've learned from the parents.

parents events. Every child is on the verge of a mental breakdown. But don't worry, we have 800, 800 numbers, and we have a SWAT team. If your kid even blinks suspiciously, a SWAT team of adolescent psychiatrists are going to drop from the skies and give your kid therapy and call you in accordance with HIPAA laws or whatever. And I'm like, if the kid isn't fucked up, the parents are going to be fucked up by the time they leave, this session that has convinced us that every kid is an emotional tide pool. It's actually fascinating this experience for you. It tells you a lot about where college is headed, where young people are headed.

It's really interesting. But that's very exciting stuff. I'm very happy for you, and I'm very happy for your son. And I'll also say, I met your other son for the first time, talk about well-adjusted kids, had a great time at the England game with you and your son and your buddies. And I had an incredible experience. England is, I mean, it's hard to talk about it because this episode will be out on Friday so we don't actually know what the result of the semifinals will be. And I'm not going to make any predictions because I don't want to jinx anything. But that was, that was highlights of the

year going to the England game. So thank you for bringing me. I've been talking about this a lot. I feel like all the goodwill that was bottled up between nations in and amongst each other is coming out at this World Cup. It was great to have you there. I'm taking my sons to the last three World Cups now. We're going to the final on Sunday. And to see all the UK, all the British fans rowing and to see all the Norwegian fans also singing Sweet Caroline, I just thought it was, and I've described it, it's like cousins who love each other doing a sleep over when their parents are out of town, and despite the fact their parents are fighting all the

time. I've been to World Cups. I wasn't at the World Cup in the U.S., and I think it was 94. I've been to Russia, Qatar, and now this one. This one is the best. Okay, well, we have a big episode to get into here. We're speaking with the one and only Mike Novagrat, so let's get into it. Today we're speaking with one of the most prominent leaders in the crypto space. He founded Galaxy Digital in 2018, one of the industry's leading digital asset investment firms and has been investing in crypto for more than a decade. Back in 2013, he invested $7 million of his own money in Bitcoin when it was trading for roughly $100 a coin. Last year, it peaked at more than $126,000. But recently, crypto has fallen on hard times.

Bitcoin is down 27% year-to-date. Ethereum has fallen 37%, and Solana has fallen 38%. At the same time, AI has emerged as the market's new obsession. And few investors have embraced that shift more aggressively than today's guest. So we wanted to talk to someone who's been at the center of both worlds to get his take on where he sees both industries heading from here. This is our conversation with Mike Novagrats, founder and CEO of Galaxy Digital. Mike, great to have you on the show. Thank you so much for joining us. I want to start with crypto and then we'll talk about AI and then we'll talk a little bit about your investment philosophy. But we have to acknowledge what I would say is the elephant in the room, which is Bitcoin is having a rough year, down 50%

from its peak, down 47% from a year ago. The industry itself is struggling right now. I'd love to just get your views on why this is happening, what you make of it, and where things go from here. A little context, right? Crypto was a storytelling business. I mean, I think I was well suited for it because I'm a storyteller by nature. And we told the story of this is an important technology. It's going to change the way the world processes information, moves value around, right? Like this was going to be the new plumbing for both the financial markets and the consumer markets. And that was the story. And some very bright and creative entrepreneurs, you know, Arthur Hayes starting, created this idea of the leverage, perpetual.

future on crypto tokens. And that really created the crypto markets because it allowed young people especially, but all people to gamble leveraged on these stories. And it created a tremendous amount of excitement and capital into the system, especially after COVID when everyone was sitting around at home with nothing to do. And really kind of crypto chapter two, that grand move that brought Ethereum to $4,000 and all these tokens you never heard of into multi, you know, tens of billions of dollar market cap was really fueled by a gambling mania of young people wanting to get wealthy. They didn't want 12% returns. They wanted 12,000 percent returns. And a lot of capital got brought into the system. Some of that capital was really well spent,

right, building this infrastructure. And we're now at this crossroads where, crypto is actually going to be used. And that blockchain infrastructure, tokenized stuff, is going to get used all over the world, some with crypto tokens, but not many, many with traditional assets, perpetual equities, tokenized equities, stable coins, which are perpetual currency, I mean, which are tokenized currencies. And so it's a really interesting place. A galaxy, we're pivoting of a lot of our business to helping trade-fi companies, build that infrastructure, right? This thing is the wallet where you'll have your tokenized equities, your currencies,

your interest rate. This is the NeoBank of the future. And you see businesses outside of the U.S. where financial services aren't as good, like ByBit, Binance, BitGet. Like, no one here has heard a BitGet or BuyBit. They have 100 million customers each. Right? Robin Hood has 15 million.

So these are monster businesses that connect to the rest of the world. And why crypto is exciting from a U.S. perspective is the rest of the world wants the great American brands. They want to buy Apple and SpaceX and hopefully Galaxy and Google. I'd like to be in that category. And so the infrastructure of crypto was going to survive, be hardened, and thrive, those talks. tokens that we used to trade, if it was avalanche or Solana, some will survive, but many will drift down because they were really association tokens. And a lot of that was the fault of first Jay Clayton and then Gary Gensler of not really making the rules clear and prosecuting people. So people

made crap tokens like Franken tokens so they could kind of, you know, skirt the rules and were too scared to have a token that gave you economic value. And then they were like, well, they're going up anyways. And so I don't have to give away the economic value. And I'm getting paid just for, in essence, creating a bunch of meme coins. And now you're seeing that, you know, those things drift down to less relevance, not to oblivion because those communities still care about them. Right. What was unique about crypto is you build community around a story. that community was fiscally incented to bring more people in their community

actually to drive the price of your token up. And man, they don't want to give up because they're like religions. And so, screw with the XRP army and there's hell to pay. It's really interesting to hear you say that because, I mean, you're describing this dynamic where it was this, as you say,

speculative gambling mania that really drove this bull market. But it's interesting to hear that coming from you because that has long been the largest criticism of crypto, that some have said that there's something out. It's not just speculation. It's not just gambling. There's something more inherent to it. And it's usually been the crypto bears who say kind of what you're saying, which is it's a lot of leveraged gambling. That's what drove the valuations to them. Listen, there is a technology that is being used.

I mean, I'm literally doing deals with five or six, hopefully, a big traditional institutions to help build infrastructure, right? You're going to see that crypto infrastructure, automatic settlement, being able to transfer value over the internet, used all over the place. Again, overseas crypto is a lot more important than is in the U.S.

We have great financial services here. And the other thing that's happened is we've got sports betting and same-day options. And so, and now betting on Korean stocks, right? Every young kid that used to buy Salana is buying Heinz or some memory

company. And so a lot of the oxygen of that speculative frenzy shifted. And just like in macro, you saw it, you know, there was a golden silver bubble it popped, right?

That was the top. That's what tops look like. Crypto had that same topping pattern. It doesn't mean these things go back to zero. I think Bitcoin probably holds $60,000. And if the

Clarity Act passes, it's probably a 60-40 that it does. we head up a little bit higher. There's too many people that have bought into the Bitcoin story as its own store of value for it to go away. But someone asked me what crypto was like this year. I was like, M-E-H, meh, meh.

You know, people just aren't as excited about it because there's other things to be excited about. How much of the value at this point, at the current price point, you mentioned that earlier on in the crypto cycle, a lot of the value was kind of propped up by this speculative gambling mania. a lot of that energy has been sucked out of the room. To what extent is that still a part of the

crypto story at current price levels in your view? Well, listen, if you think about Bitcoin, Bitcoin is a story. If you trust me and I trust you, we trust this ecosystem. We're going to store our wealth there. And so it's always, the value comes from trust. And there's a core group of people that that trust hasn't been eroded. And so I think, again, Bitcoin is the most stable of all the cryptos because it has the biggest community. Ethereum, which was the second biggest, had a technology story, not a store of value story, right? Bitcoin was digital gold. Ethereum had, we're going to build the base layer of trust, this giant database for people to build on top of.

That story drew people in, but the valuation came because enough people believe it, it becomes money. It becomes money just like Bitcoin became money. And so that, they're still fighting that battle, right? Vitalik kind of having less of an impact, less presence hurt that ecosystem because he was such a charismatic in his own way and brilliant and decent guy. I mean, he really is, if anyone gets a hero award for crypto, it's Vitalik. But, and the rest of them, it's just in smaller and smaller ways, right? What's been hard about this crypto universe is there were lots of fraudsters

and hypesters and scamsters. And so as you separate the wheat from the chaff, we'll see which of these big protocols are used to build on. And then there's new ones that come out, right? I mean, Robin Hood is pretty interesting to look just how quickly people have jumped on their chain. I buy that Bitcoin is a legitimate store of value.

And consumers on both sides of the trade, they get to decide what is a legitimate store of value. If a baseball card or Pokemon cards are a store of value, there's no reason that Bitcoin can't be. So I buy that. What I heard in your earlier comments is you think we're at a bit of a tipping point in terms of the underlying technologies creating utility across different industrial transactions or businesses. I haven't seen that. I feel like we keep getting promised this future where this underlying technology

becomes this incredibly efficient plumbing infrastructure. for all types of businesses. And I'm not saying it doesn't exist. I just don't. Can you give us some examples of how an end consumer or an end business is benefiting or has recognizing the benefits of this tipping point of the incorporation of technology into consumers or businesses' lives? So the only really big one has been stable coins and with cross-border payments, right? So we have invested a lot of different businesses that in Latin America and in the rest of the world that do cross-border payments and make that much more efficient. And those are, those are, if you just look at stable coin usage, it's mostly out of the United States. And so some of it's store of value just in

dollars instead of Bitcoin, but a lot of it is in transaction value. And so I think stablecoins is the first. We're seeing the very beginning of tokenized equities. Explain what that is, Mike. You take galaxy in tokenized form, and it's the exact same thing as owning it. So there are 8 billion people on the planet probably five and a half billion don't have access to a brokerage account, maybe six billion. And so if you're the kid in Bahrain and you want to have some savings, you want to buy a fraction of an Apple share, you're going to be able to buy it. Now, I said earlier, most crypto kids want leverage. And so what's been interesting is the product that has grown faster than tokenized equities is perpetual futures, tokenized

perps on real world assets. And so if you think about like this company XYZ, my friend Jeff Lohbilt, it's doing or annualized a trillion dollars in volume for a six-month-old company. But the SpaceX pre-IPO, it got all the volume. And it literally predicted the price to the dollar of where it was going to open, right? And so 24-7 trading, non-KYC. So anybody in that $6 billion just shows up with an account and starts buying and selling. And that, I think, shows you the demand globally when you've got 6 billion people that are outside of the financial system. So this question is more about kind of how you've been able to manage your brand and Galaxy's brand.

When I think of crypto, I think of some central players, sort of adjacent as Trump, because I would argue, and we'll get to this question, because of his ability to use crypto as an empty vessel for his corruption. Obviously, that's a loaded comment. There's FTCS. That didn't end well. there's Michael Saylor, and I think Michael is seen as a legitimate business person. Obviously, there's real substance.

Anyone who knows Michael's background knows there's real substance there, and also that he votes in a big way with his feet. I mean, his actions match his conviction. But at the same time, I think a lot of people look at some of his perma bull on it with a decent amount of skepticism. And then there's Mike Novogratzen Galaxy. And you're sort of perceived as, and granted, I'm known for glazing our guests, but it doesn't mean I don't mean it. But you're sort of seen as the clean, well-lit corner of crypto. You haven't been tarnished with this sort of carnival barker constant pumping. You're somewhat sanguine.

You have, you've called out, you know, fraud or or hype. you see it. Just sort of curious as to why, what are the principles and why do you think you've been able to, if you will, not get infected with what feels like a little bit Barnumann Bailey slash Adam Newman like Sam Bankman-Fried-like skepticism here? What principles do you try and incorporate into the firm and into your own brand that's been able, quite frankly, you just seem a little bit above the fray. Well, I mean, part of it is, you know, you have your kitchen cabinet in life, right? And so your family's part of that. But my macro kitchen cabinet, right, guys like Paul Jones and Lewis Bacon and Stan Druckumeller, it would just be embarrassing to not be truthful, right? Like,

you've got to kind of call a spade of spade in some ways. And because I grew up as a macro trader, and in that community, it's my fantasy football league. It's guys I speak to every day, at least one of them every day. They help hold you to integrity. The people you surround yourself with in life are the people that hold you to integrity. I mean, you'd like to think it's all internal, but it's also that external. Like, who's your community that you don't want to disappoint? And I think that's important. I'm like who you surround yourself with in life. And so, listen, I've spent a bunch of time with Michael Saylor. What I think I'd say about him is he believes everything he says. I agree. Sometimes, like, Michael, that sounds insane. But he literally...

No, he might be wrong, but I don't think he's a fraud. Right. And I think, listen, he did a lot of good things in pulling Bitcoin in, and now it's, you know, one of the weights on Bitcoin is he's got this, he put too much leverage onto a big pile of coins, and he's got to dig himself out of this over-leverage position. When you speak with him, Mike, because that's the real problem, and it's a problem that we all knew and could have predicted would have happened.

And we had him on the show, and we were like, what happens if it goes down? what happens to your position? And he said something to the effect of, like, well, what happens if a meteor strikes tomorrow? Which to me was like just a total false equivalence. Now he's in that position. Like, does he acknowledge the point that you're making?

To be fair, and you can call me a wimp, I haven't had a really hard conversation with them post this. The last time, you know, I saw him for, you know, at length was a year ago summer when it was all working well. And I did say, Michael, I'm skeptical. He believed he was going to buy so much Bitcoin, there was no way he could go down. I was like, it's a, it's a tautology that doesn't work with me. And, you know, he also had this fascination with tapping into the fixed income markets, right?

The fixed income markets are two and a three times the size of the equity markets in the world. And so creating a fixed income product, which he did with his, you know, perpetual. I mean, the crazy part is, not that he would do it because it would really tarnish his brand, if you read the contracts on these perps, you know, STRC, paying the dividend is optional. I mean, it really is equity. He could turn the dividend off legally and just like tough luck. And he can turn it back on when he wants to. It's not, it doesn't accumulate.

It doesn't. And so, you know, he was very thoughtful on how he structured these stuff. It just is not thoughtful enough. because once you do that, then the game's over. And now he's got a big burden to carry unless, listen, what could get Bitcoin going higher again? You saw the CPI number today. You know, Kevin Moore breathed a huge sigh of relief.

I don't think Kevin hikes rates at this next meeting, and he probably doesn't in the fall if, you know, inflation stays sanguine. But if you flip to where he's cutting and you get clarity, passed. And, you know, the Chinese are big players in this. And I never believed in the four-year cycle, but everyone else did. And the Chinese certainly do. And that cycle kind of kicks back off in October of this year. And so you could, but you can make a narrative where the buyers come back in and you get a story again. I don't see a lot of energy in the space. You know, my hedge fund guy

just says call me every day. Now they call me once every two weeks about crypto. They call about other stuff. You know, it's just not as exciting of a space. And so all the crypto businesses are kind of batten down the hatches. And we do see what's coming, right? I mean, X, Y, Z is doing a trillion dollars of volume. Like that business didn't exist. Hyperliquid who created a token where it feels like an equity, right? As it does better, the price goes up. And so the future is kind of out there, but we haven't seen it yet. We'll be right back after the break. And if you're enjoying the show so far, send it to a friend.

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says he's selling and then does sell, I mean that's a that's a real problem for the industry. But then on the other side, I would say that Trump's involvement, I mean, the fact that we just learned that he earned $1.4 billion from crypto last year, he out-earned every crypto company in America. He earned more on crypto than Coinbase. It's just unbelievable. How much do you blame it on him? It's so interesting. It's a double-edged sword. Like, Gensler and the Democrats were terrible on crypto. And as a Democrat, I was like, this is almost not American, like what they were doing. And Trump ran on, I'm going to take care of crypto. And he did. So that initial surge was, okay, we've got an SEC and a CFDC that are going to be very crypto positive. And in quite frankly, to be fair to the head of the SEC, he said, have we ever talked to him right before the inauguration? He said, until their rules, I'm not going to enforce the rule.

Like, I'm not going to enforce non-rules. And so in essence, he said, go for it until the Clarity Act passes. And people did. And so companies like, quite frankly, hyperliquid and XYZ, right, non-KYC companies are growing and thriving, not thinking they're going to have, you know, the same thing that CZ or Arthur Hayes did, right? The long arm of the U.S. law getting them even if they're not U.S. companies. I think what Trump also, and listen, Paul Atkins, I'm telling me this. He said, listen, I'm all about disclosure. If it's disclosed, buyer beware.

That's a big boy's Republican idea, right? Democrats want to protect the consumer, buyer beware. All of these Trump coins, Will Fee, the meme coin. If you read the freaking tiny fine print, it says, oh, I, it's not he made all this money from selling the coins. Every transaction, they got a marketing fee. And so it's all in the freaking fine print. And it's like, oh, my goodness. The question is, who reads the fucking fine print?

Yeah. So, like, they made $600. million dollars off Trump coin when it went straight down. And then there's also for people that sold the coins. And so, listen, it doesn't help at all. Like this Clarity Act, if it doesn't pass, it's going to stumble because of the ethics piece. There's even a Republican for saying we need some.

That's like, it's hard for Republicans. They're running on this thing that looks more and more corrupt. And people are like, and I go down to D.C. At least once a month now, I'm like, guys, look past it. It's what's good for the country, what's good for the industry? give clear rules. That's good for any industry. And there were plenty of legal ways to go after a president who's doing bad things, right? From a volume's clause to just you're not allowed to insider trade. Like we have a Department of Justice who has decided not to pursue cases against what normal Department of Justicees would pursue. And so I argue that why should crypto have a special set of rules, right? You can look at the same thing with the rare earths, the Kazakhstan deal. I mean, there are plenty of deals. that don't feel up and up. But the bulk was crypto of the wealth.

And so that's become a real political hot potato. So what you said before, that kind of crypto is a story. If you have an asset that doesn't produce underlying cash flows, it doesn't have hard assets, then it is sort of, it feels like an empty vessel

that is filled with a story or a narrative. And that describes a lot of stocks right now, and the word we use is meme, right? do you think that the energy, and I like the way you described it, there's just more energy elsewhere. Do you think the story shifting to SpaceX and AI, do you think a lot of that mentality or that got stalled or the kind of person that was buying crypto is now, quite frankly, more interested in trading, you know, zero-day options on SpaceX right now? We see it, 100%.

That's, that's, it's so interesting because you could, even in non-crypto people, so 100% with crypto people. And I talked to those two big Chinese firms I was telling you about, they were like, they're dying to get into the tokenized equity game because their customers want it. People want to go where the heat is. But even in bigger macro, right, because Trump came out at the beginning and started down, you know, bashing the dollar, really, right? I don't want to be part of the international community, you know, like they wanted a weak dollar. Now Besson's changed that a little bit, but the early story was screw Canada, screw, we're going to take out Greenland. And this idea of where should you, if you inherit $10 million, Ed, like, what's the safe place to be?

Was it in the dollar? Was it it? And so everyone went gold and silver. Then gold and silver had a huge move in its bubble. It was Bitcoin and then golden silver and then Korean stocks. And so moving the hot potato of where to stay ahead of your neighbor. Because remember, wealth is all about am I richer than you? Right?

It's not an absolute number. It's a relative number. And so I think being a wealth manager has gotten so much more complicated because you have these hypervall places, which are exaggerated by all the leverage. I mean, right now in the U.S. equity market, we have never, ever had as much leverage in global markets. This is, we're one of one here. We're above 29. We're above 07. We're above 99.

And so it's a very dangerous place to be. We had Tom Lee on the show, and we had him on when Bitcoin was suffering recently. He said he sees Bitcoin going over $100,000 by the end of the year. Do you agree with that? And do you have any predictions for Bitcoin price? His lips to God's ears. Listen, can I make a case for it? Sure.

We would need Clarity Act. We would need the Fed cutting rates. and we would need some buyer base to get reignited. I'm not seeing those three things. I don't think we cut rates this year. I think we'll be good enough not to hike them. Clarity, I think, this is a 60-40, maybe even at two-thirds at this point.

My gut feeling is somehow they find it to get away across the finish line, and that will help. I don't see where the new enthusiasm comes from. But the one thing I would say is every time the crypto feels dead, like something happens and you're like, whoa. And so I don't want to, I don't want to count it out, but I don't see it. And in the past, like, the easiest crypto bull market of all time was COVID because you're like, oh, that's my narrative.

And I feel like I'm an insider because I'm one of the storytellers. And I figure out what's the story I can tell to get people excited? And it was, you know, the money printer goes burr, right? like we were going to throw tons and tons of money at the COVID problem. And you had kids that now had more time to sit around and do nothing but gamble. Yeah, it's exactly right. If you had to predict a price point by the end of the year. I think 60's going to hold and I think 80 is going to be a top.

And if we can get through 80, then 100 is going to be a top. But I would say we're 60, 80 for the rest of the year unless we get a real nice setup. Shifting to AI for a moment. Everyone knows Galaxy Digital as a crypto company. they know you as a crypto investor, which is why I think a lot of people might have been surprised to read a headline in the Wall Street Journal last week, or maybe a couple weeks ago, it said, quote, Galaxy Digital stock surges on AI data center business. This is a very interesting story.

Galaxy Digital is now in the AI business. How did that happen? How did you get into this? You know, the crypto community sometimes has a little rainbow that follows. is it around. The biggest users of energy free AI were Bitcoin miners. And we got into Bitcoin mining partly out of another Trump thing when he came up with the 2020 Opportunity Zones, or maybe it was 2016. When was the Opportunity Zone thing came in? But in 2021, it was a monster year in profits and crypto. And I was like, I don't want to pay all this capital gains tax.

Let's put it into an opportunity zone. One of the the best assets for an opportunity zone within our space was Bitcoin mining. And so having never been a Bitcoin miner, because I didn't like the business, I'm like, well, but for this tax advantage, we'll go into Bitcoin mining. And, you know, I said something before. You don't have all the cleanest players in crypto. And after a couple mistakes of hosting our machines at other people's data centers, we decided we wanted to buy our own data center. And now it's 2022. And there's this company that owns a giant data center in Texas that is close to bankruptcy. And we help them avoid bankruptcy by buying their big data center and lending them some money.

And so we got our hands on what looked like one of the best Bitcoin mining data centers in the country. And we put our machines there. And it was a decent Bitcoin mining data center. When AI kicked in and people started talking about this giant, bull market in power, I was like, dude, we own a lot of power. And, you know, so some of it's luck. Some of it was us being smart and saying, because I wanted to buy it or partner with it and say, no, no, this is more valuable than we think. And now we've developed it. I think this helios is the campus, I'm pretty certain will be the largest data center in the United States. That's not,

you know, being built behind the meter. That's part of the grid. We're already 1.6 gigawatts approved. There's another gigawatt that is in the queue that we'll know about in first quarter. But even at 1.6 gigawatts that is a massive data center. It is, for us, it's about a $16 billion cap-ex spend. Then the people that put the chips inside it, probably another 60. So just from what we're already contracted, it's going to be a $75 billion cap-x bill. If you build the whole thing out, it'll be over 100. The only $100 billion cap-ex build in American history is the interstate highway system.

And so for me, it's interesting to become a landlord because our business is we have the power. We go get a lease from somebody who says, I'll rent it from you. You take that lease. We go to the bankers and say, we need to borrow the money to build it. and build it, you got to build on time and on budget, and then you collect rent and pray your tenant doesn't go bust. Exactly. Which is increasingly the question for the AI data center ladles

for some of these companies, right? Yeah, I look back, and I couldn't find an example of a top three market cap company in the world, never going bankrupt in a 15-year period, right? Nokia got close, you know. Yeah, but I just want to double tap on that, because Amazon lost 92% of its value, so did Cisco. They didn't go bankrupt, but they lost 92.

And what I want to describe a dynamic and just get your thoughts. It seems to me that in the last 90 days, there's been this dramatic shift potentially from a supply crisis in AI to a demand crisis. And that is a lot of the front end guys who were supposed to be creating all this demand on the front end, including meta, the largest scaled platform in the world, XAI have all of a sudden decided, okay, we overestimated our ability to create demand on the front of these LLMs, but we have this incredible infrastructure we've developed. And then we have Mike Novigratz, who previously or fortunately built a bunch of data center capacity for

crypto. It feels like, and tell me where I got this wrong, we've moved, we've flipped from a supply crisis where there's not enough compute to potentially not only meeting the supply, because everyone's flipping from demand generation to supply generation for essentially, as far as I can tell, the only people who are creating demand right now are anthropic and open AI. Are you worried that the pendulum swinging the other way to a demand crisis? It's going to be a very quick moving pendulum back and forth. And I tell you what, so first of all, most of the power that you've talked about, like of our 1.6 gig, megawatts, 200 megawatts is now up and running and producing, you know, AI stuff.

And so it's just getting started, this power being brought online. But most companies aren't really using AI yet because they're scared to. They don't know how to. We don't have robots yet. Like when you look at the exponential usage of compute when it starts really happening, like, it's hard to think of this. But we're in like the first out of the first out of the computer. first inning. And I mean, even in my company, and I didn't screen, we've got to use more. I just did a 40-minute call with, you know, Anthropic and their internal team to, because they have a

team to help people learn how to use it better. I think, and we should be more cutting edge. I think the bulk of America isn't even really using AI yet. And the real use, I mean, the real use cases are going to take so much more power. And so, but I don't. think it's a linear line because I think you're right. You're not going to have five of them. You're not going to have, you know, these, you're going to have some guys win and other guys get knocked out. I just think it's early to be, even to think Anthropics is going to be the winner. It's early to know. Like, every time I've counted Elon Musk out in my life, I've been spacked in the jaw. Tell me about it, brother. So, but that's, you just zeroed in,

or you've identified what I think is the fulcrum or the epicenter, the plates crashing into each other around, what is the central question or debate? And that is, are we just scratching the surface? We didn't even imagine all the different uses for broadband, right? We thought, oh, at some point, if the chip keeps doubling in power and halving and cost every 18 months, we're not going to need anymore.

And we have invented ways to use broadband a lot faster than even the exponential increase in it. And I absolutely conceptually understand. At the same time, I think there's a countervailing argument that actually it's not that we're on the precipice of an explosion in ways to use it. A lot of companies are using it. They're just not getting the return they'd initially anticipated.

And then we might, in fact, I think there's a decent thesis that a lot of CFOs are going to say playtime is over. I need you to either justify the return on investment in our token consumption or to reduce it. Well, the cost of tokens is going to have to go way down. Here, let me tell you a story. A quick one. I invested, not through Galaxy, PA investment in this young kid who was building an insurance

company, a health insurance company based in Texas, a brilliant kid. He was scientists of the year in the UK when he was like 16, not young scientists, scientists of the year. and, you know, he had a great thesis and he was going to use AI, but the thesis was more, can I incentivize people to get tested early on? And then if I do that, I'm going to give them no co-pay and no premiums because I can drive medical expense down 30 percent. And he's doing that.

So then he says, I'm going to use AI. First, it was all the back office, right? There's huge amounts of paperwork pushing at Aetna and U.S. health care, right? That needs you as healthcare. Legally, they can have a 15% charge. 85% goes to the providers, 15% to them. And they do 2 to 3% margins. And he said, well, I can AI all the paperwork.

Then he said, let me create an AI sales force. And I was like, what? And right there, hundreds of hospitals and psychiatrists and healthcare systems. that you're trying to sell this to. And he created AI Lucy that scanned the phone book, and I figured out who my targets were, figured out who to talk to at that target, sent them an email, started the conversation,

start to finish, he got the docu sign. And his Salesforce of 50 people did not. 90 clients, in the two-month sales period, did 90 contracts. So basically, two each. Lucy in her first two months did five times that by herself. And he was like, oh, my God. And so it's the first example I've seen as someone who's actually created a real superhuman employee that's soup to nuts sales in a pretty complicated business.

And now listen, this boy is, he's a boy genius. I think I'm going to make more money on this company than I have on any venture bet, I hope. And so I'm a cheerleader. But more importantly, I was like, you know, that's not just processing and making some more efficient. That literally is superhuman. I just think we're so early in this thing. But it's a good, here's another example. Like, Goldman was telling me that they record all the conversations.

And at the end of the night, they run it through and figure out what's the collective brain thinking. And you say, well, you get these little robots that follow people around. So if I'm having a conversation with you, the only way the recording is going to be if the robot follows me around. And so now it's recording us talking by the water cooler. That robot has so many, you know, touch points to be able to follow you around and record. Like that's like that's the usage where they say it goes in. infinite, right, that every last device is connected to, to this grid of AI. It's a future that's a weird one, but that's the bet. And if it's just people using it to make their email more efficient,

Scott, you're 100% right. But it's, you've got to have that imagination that, like, there are no driverless cars in New York right now. And I never, I mean, I'm sure there are a couple, but you never see them. Like, if in five years, the whole fleet's driverless. And if you got to, you got to the new Tesla, you know, Tesla's self-drive. I mean, I hadn't done it in years because I was just, you know, take my hands off the wheel and it would stop. Now you just can go like this. I don't know. And what I do know is Scott's right in that you're going to have this lurch left, lurk right, lurch, left, lurch, right. This is not going to be linear. And we're at parabolic, right? Like, markets went parabolic. And so I think it's very good. The equity markets,

They're very dangerous right now. Yeah, I guess the trouble is, to your point, these futures are totally possible. They're totally on the table. The amount of capital that is going into them, that is being invested, would make you think that they're inevitable. And that's the problem, is they're not necessarily inevitable. And similar to what we saw with the dot-com boom, there was a massive period of overinvestment, overbuilding, knowing that something would happen, but not necessarily knowing what, it would actually be, it does seem quite similar to what we're happening seeing right now. Even the stats I gave you, for us to build out our full data centers over $100 billion,

and that'll be the biggest cap X. I mean, Galaxy was a small company. Like, we were in a data center company. We're not, you know, we're a, you know, 10 plus billion on our market cap now. But there's a lot that has to go right for us to actually, by 2031, say, dude, I spend $100 billion. dollars. See, I think you get spent it. It's due to it worked. It's the hard part. I think in this environment, you could probably spend it. Well, there are so many. I mean, what you're saying now in

Texas is they're like, okay, stop. Because so many people applied for permits and whatnot, if you looked at, and why the politics are changing data centers, if you looked at everything that was applied to be built, the whole country would look like one giant data center. I mean, the whole state. And so now all the politicians are like, well, well, that's not right. And so they're doing some smart things to say, hey, you've got to put the money up first, and lots of people are falling away. But I think of what you read about and hear about and are proposed, 10% will get built. That's still a huge number. We'll be right back. And for even more markets content, sign up for our newsletter at profgmarkets.com. It all started with Call Me Maybe. Over 10 years

ago, we created Switched on Pop to Listen Closer, uncovering the songcraft behind even the glossiest of pop hits. Since then, we've released almost 500 episodes. We've defined the sounds of our modern soundtrack and interviewed hundreds of musicians and music insiders, including the singer of Call Me Maybe herself, Carly Ray Jepson. I'm musicologist Nate Sloan, and I'm songwriter Charlie Harding. And on July 14th, Switchdown Pop is embarking on a new chapter. We're stepping out from behind our microphones and in front of the camera to stream our podcast on Netflix. Now, you'll still be able to listen to the show anywhere you get podcast. But now, you'll be able to watch us each week, breaking down the sounds of the moment, digging into musical minutia with your favorite artists and offering questionable dad jokes, as always.

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I don't think there will never be a woman president in the United States. Now, why, wait, you can't just walk away on that. Tell us why. I know it's still early to talk about 2028, but as we build to our post-Trump future, it seems to be a big question about the Democratic Party. Kamala Harris leads all of the presidential polling. So does this mean that the person who led the ticket in 2024 is going to lead the party again in 2008? The campaign needs to be called bye-bye.

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Mike, when I ask people what the secret was to your success, and just for people who don't know, I mean, there's a long track record here. Before, I mean, now you've made this incredible AI bet that is paying off. You had the crypto bet that paid off. You started Galaxy Digital. You worked at Goldman for a long time. You made partner by 1998. Before that, you were the captain of the Princeton wrestling team.

Princeton alone myself, go tigers, helicopter pilot in the New Jersey National Guard. Like, you've had a pretty incredible track record. He's launching a cologne called testosterone. Jesus Christ. So my question... Fucking A. Yeah, it's a good, it's a good, it's a good resume. So when I ask people, like, what is the secret to Novo?

I always hear the same thing. everyone tells me Novo has a risk tolerance unlike anyone I've ever seen consistently where does that come from? The irony is it start off of fear of failure like I was like

I was supposed to do well born a cute little kid my mom told me I was going to be the senator one day and so I had fell all this pressure to succeed and actually it stopped a lot of early success I think my wrestling career would have been better if I wasn't so nervous all the time. And then having failed a couple times

and realized I didn't die, there was kind of the opposite of fear of failure. It was like, hey, let's go for it. Let's have some fun. And I do have a high-risk tolerance. Partly, you know, I grew up with a great family. And I was really happy when I was poor, or middle class.

I went to the Army. I made $18,000. There's some of my most fun years. And so while I spend a time, of money and I have fun with it. I was never attached to it as much. And so, listen, there's still a, I don't want to fail gene in me, but it's not the fear of it. And I don't have the fear of looking stupid. And maybe that's coming from confidence of having been raised by a loving mother or whatever, but I don't have the fear of looking stupid. And I've looked stupid a few times, you know, I've got a Luna

tattoo and Luna went to zero. You know, I'd like certainly have. look less than, less than, uh, you'd like to. That doesn't scare me so much. I'm like, hey, guys, I got on this thing. We actually made money on it. And, you know, the world turned. And, uh, and, uh, and so I do think it comes from some confidence that you get as a young kid, uh, that, you know, because otherwise you're, you're, you're going to sit there. And it's always, what do people think about me? If you, if you, if you get away from what people think about you and say, hey, all right. And I used to say it on TV, I said, listen, to my employees,

I said, you guys are taking a lot of risk joining this company, because crypto might not work, and you're going to have taken your great years of your life. I said, all I'm risking, I already have money. I'm risking, like reputation. I'm going to look like a complete idiot. I'm willing to do that. But it's, that's, my mind was less risk than the 28-year-old

who's at that core of their career saying, I'm going to spend the next six years in this weird industry. And I'm happy for lots of people, it paid off, I think the journey itself was good enough for most people in this industry to feel like it wasn't a waste. But I don't think you have the same people in this industry in the next five years, right? They'll take those skills and do other things. I just want to pause on that. You know, Goldman Sachs, Army, multi-billion dollar firm, Princeton.

And what you said that really struck me is that if you reverse engineer your own confidence, you reverse engineer it to the, to a loving mother. I want you to end here, but I just want you to talk a little bit about your parents. You know, listen, I have, even middle-class family. My dad just passed,

and we were at his funeral, and we were like, when we were writing his obituary, you know, some of the siblings were saying, well, he did this. He was an all-American. And the obituary really became who he was, not what he did.

And so I had a really strong, quiet dad, who I don't think, you know, I was comparing him to Trump. I don't think my dad has broken one of the seven deadly sins in 50 years. And, you know, he was a very kind of moral center. And I had a mom who was really aspirational and a cheerleader. And there were seven of us. She worked as a waitress at one point, you know, to kind of keep selling antiques. She was a hustler.

She came from Queens. She's still alive and is still going strong. And, you know, we just had that kind of idyllic 1970s American. you know, military family, you know, my mom always told us that we can be the world. I mean, she, I think she thought we should be the Kennedys. I mean, she named my sister Jackie, my brother Rob Bobby. I was Michael John John. We had several names.

But it was that era. And, you know, she's a big cheer. She's still a big cheerleader to all of us and all the grandkids. And, you know, my dad's funeral, the telling point was there was the caskets going down the island. and there are 23 grandkids walking behind it. And that legacy of big family, you don't have that as much in America anymore, but it does allow you to take more risk.

Because you know there are some people you're going to screw up and they're going to have your back. And when you do well, they're going to take the shit out of you, right? Like, you know, brothers and sisters and big families don't allow you to be special.

So just one anecdote that is related. I was doing a podcast. with your sister, Jacqueline, and I was talking about something, and my usual cynical, depressed manner, she just kind of stopped and she said to me, she looked at me in a, in a sincere way, she looked at me, and she said, I get the sense you could really use a hug. And it was so arresting.

Like, I just wasn't expecting that, and I feel like I can handle anything. And I'm like, yeah. And she got up, and I got up, and she hugged me. So, anyways, a weird way of saying, like, your mom clearly did something right. Yeah, we are a family of huggers. And drinkers, you know. The first time a podcast guest has said to me, you need a hug.

And was right, by the way. I'd like to go back and see what went wrong in that interview to get to that point. Anyways, bring us home, I thought you might get on with a play. Yeah, just one final question here. You said part of your success was you were able to shed a fear of failure and a fear of embarrassment, which I think from all accounts I've heard about you is true. A lot of young people listen to this show, and I'm sure a lot of young people would like to know how to get rid of that fear. What would be your advice?

I had screwed up at Goldman Sachs, and I was no longer there, and I was trying to figure. I felt so embarrassed with myself. And I did this six marathons in a row across the Sahara. And about halfway through in grueling pain, but in this gorgeous, you know, sun and mountains of sand, listening to the same nine songs, because that's all you can get on an MP3 player. I was like, what are you complaining about?

You're fucking alive. And that physical piece to it kind of brought me back into my body and into like, you know, stop being a whiny bitch. Like, go for it again. And so for me, it's been a lot of them. I mean, from ayahuasca, trying that journey, understanding. Because one thing about ayahuasca, when you're on it and you're like a puddle on the floor and you're crawling around and you're throwing up, you're like, how idiotic it is to think you're more special than the next guy. You're just like, what in God's name?

And so that all of those things, and I don't think I've reached some, you know, Buddhist state by any stretch. I think I'm as far from it as most. But that journey helps you kind of de-stress the, oh, God, what are people thinking about me, right? The other thing is service, the more you think of your life in service, I want to, I work really hard to make money because I want to do shit with it. I'm building a hotel in New Orleans. I'm building of our park somewhere in the Hamptons. I'm giving money to these different charities. I'm trying to change politics.

Like, the moment you start thinking about others, you stop thinking about yourself. And it's the greatest hack for public speaking. People go out for a wedding toast, and they're all nervous. Like, what are you guys nervous for it? This is your best buddy. How about think about him

and just talk about how they're in love with each other and you're happy to be here. And like, wedding toast should have no nerves to them. But most people get nervous. I say you're nervous because what do you think about you? And so if you can flip the source, switch and think of your life in service, it takes a lot of the stress away. That's great advice. Mike Novigrats is the founder and CEO of Galaxy Digital. He was formerly

a partner in Fortress, Investment Group prior to Fortress. Mike spent 11 years at Goldman Sachs, where he was elected partner in 1998. He also served on the New York Federal Reserve's Investment Advisory Committee on Financial Markets from 2012 to 2015. Today, Mike serves as the chairman of the bail project. This is going to be a long one and has made criminal justice reform a focus of his family's foundation. He also sits on the board of overseers at NYU Lankone Medical Center and his board member

of Princeton Varsity Club and Jazz Foundation of America. Mike received an avian economics from Princeton University and served as a helicopter pilot in the U.S. Army. That's a great place to end on the resume. Mike, we really appreciate it.

Thank you so much. Guys, thanks. Here's the guys that are follically challenged. There you go. This episode was produced by Claire Miller Alison Weiss and engineered by Benjamin Spencer. Our video editor is Jorge Carty. Our research team is Dan Chalon, Christian O'Donoghue, and Mia Silverio. Jake McPherson is our social producer. Drew Burroughs is our

technical director and Catherine Dillon is our executive producer. Thank you for listening to ProfG Markets from Profg Media. If you liked what you heard, give us a follow and join us for a fresh take on markets on Monday.