Galaxy Digital’s Novogratz: New U.S. Crypto Laws Could Break Bitcoin’s Four-Year Cycle

Galaxy Digital CEO Mike Novogratz believes two landmark U.S. crypto bills will spark a wave of new investment that could disrupt the market’s traditional four-year rhythm. 

Speaking to Bloomberg on Tuesday, Novogratz said the recently enacted GENIUS Act—which regulates stablecoins—and the CLARITY Act, a pending bill that clarifies federal oversight of digital assets, are poised to reshape market behavior.

“With those two bookends of legislation, it’s going to unleash a tremendous amount of new participation in crypto,” he said.

Novogratz Highlight Halving Pattern Shake Up

Bitcoin markets have long been thought to move in cycles tied to the cryptocurrency’s “halving,” when mining rewards are cut in half roughly every four years. The last halving occurred in April 2024, leading many analysts to expect a typical bull run followed by a cooldown.

Novogratz, however, argues that this time may be different. He noted that in past cycles, investors sold heavily at market peaks—such as in 2017 and 2021—but he doubts they’ll follow the same script now. One reason: stablecoins can now be used more widely and legally, even on everyday platforms like iPhones and social media apps.

“You’re gonna have this new wave of participation,” he said. “So we might not be in the traditional cycle.”

CLARITY Act Seen as “Freight Train”

Novogratz isn’t alone in his optimism. Coinbase CEO Brian Armstrong recently called the CLARITY Act a “freight train leaving the station,” predicting Congress will pass it soon. The measure would define how U.S. financial regulators share responsibility for overseeing cryptocurrencies.

Representative French Hill added last week that the House Financial Services Committee hopes to take action on the bill in October or November.

Political and Market Dynamics

While some Democrats have expressed concerns about the Trump family’s crypto involvement, Novogratz said those worries shouldn’t derail the legislation. “I don’t think you can prevent the children of people in power from participating in business,” he remarked, though he acknowledged that opponents could frame it as potential “grift.”

Despite political friction, he believes enough Democratic lawmakers now support crypto to move the bill forward.

Novogratz also commented on the recent market slump that erased nearly $200 billion from crypto valuations. He attributed the drop to heavy selling by large Chinese miners and bearish remarks from BitMEX co-founder Arthur Hayes, who recently sold his Hyperliquid (HYPE) holdings to buy a Ferrari. HYPE has since fallen more than 23% from last week’s highs.

Even so, the exec called the decline a temporary pullback rather than the start of a deeper downturn.