Galaxy Digital CEO Mike Novogratz warned that legacy cryptocurrencies including XRP and Cardano face an existential risk if they fail to transition from community-based narratives to measurable business utility.
Speaking on the Galaxy Brains podcast in late December 2025, Novogratz argued the digital asset market is undergoing a structural shift where multi-billion dollar valuations will increasingly require justification through protocol profitability and active usage rather than speculative loyalty. Novogratz characterized the current market cycle as a pivot from “narrative-driven tokens” to “business-driven tokens.”
He specifically highlighted older layer-1 networks, questioning their ability to maintain relevance against newer, high-throughput competitors. “The moment you’re not money—Bitcoin is money—then you’re just a business,” Novogratz said. “The valuations are a lot lower. And so the questions will be: Can Ripple hold it together? Can Cardano hold it together?”
The Data Gap
Underlying the warning is a widening divergence in on-chain fundamentals between legacy chains and modern execution layers. As of October 2025, Solana reported over 2.5 million daily active accounts. By contrast, the XRP Ledger has averaged approximately 34,000 daily active addresses throughout the year, according to on-chain analytics.
The disparity extends to liquidity and capital retention. Solana’s decentralized finance (DeFi) Total Value Locked (TVL) stood at approximately $11.5 billion in mid-2025. Cardano, despite a dedicated retail community, reported a TVL of $319 million in the same period, a difference of roughly 35x.
Revenue generation further illustrates the divide. Ethereum generated over $2.48 billion in protocol fees in 2024, validating a cash-flow model for stakers. Most legacy altcoins outside the top five revenue producers have failed to generate significant protocol-level income, relying instead on token issuance to incentivize validators.
The Neobank Transformation
Novogratz predicted that 2026 will be a “building year” where the successful protocols will be those that integrate seamlessly with traditional finance. He forecasts a convergence where crypto wallets and exchanges evolve into “neobanks,” offering yield, payments, and tokenized real-world assets (RWAs) in a single interface.
“Everyone’s going to try to build a similar business, which is ‘let me give you a bank and a wallet,'” Novogratz stated. He noted that tokens functioning effectively as equities, citing Hyperliquid as an example of a project burning fees to accrue value, will likely outperform governance tokens that lack a clear value accrual mechanism.
Representatives for Ripple and the Cardano Foundation did not immediately respond to requests for comment regarding Novogratz’s remarks.
Chain Street’s Take
This is the “Great Decoupling” entering its final, most brutal phase. The market is no longer paying for potential; it is paying for P&L.
If a protocol cannot prove it is “money” (Bitcoin) or a profitable tech platform (Ethereum/Solana), it is effectively a zombie company trading on inertia.
The 30x gap in TVL between Solana and Cardano isn’t just a metric, but a mortality signal. 2026 will likely force a repricing where “community” without cash flow is valued at zero.
The real question: Which legacy giant is the first to trade below its book value?
