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Galaxy Digital CEO Issues Warning to XRP and Cardano

Galaxy Digital CEO Mike Novogratz emphasizes the critical need for XRP and Cardano to prove their utility as the cryptocurrency market transitions from speculative hype to business-centered assets that can be accurately valued.

A Stark Alert from Mike Novogratz

In a recent statement, Mike Novogratz, the CEO of Galaxy Digital, delivered a cautionary message regarding the future of XRP and Cardano. He underscored the importance of these prominent tokens demonstrating actual utility in the very near future. Novogratz expressed uncertainty about the survival of these two major projects amid a rapidly evolving industry landscape. With the marketplace shifting, he raised a pressing question about whether XRP and Cardano can truly meet the challenge ahead.

On Friday, Novogratz participated in an interview with Alex Thorn, the Head of Research at Galaxy. During this enlightening discussion, he did not shy away from challenging the sustainability of both XRP and Cardano. He directly queried, “Can Ripple hold it together? Are you able to keep Cardano at the helm?” This kind of critical inquiry highlights the skepticism surrounding these established but troubled tokens.

The Market’s Brutal New Reality

Cryptocurrency is moving away from simply being narrative-driven tokens. Projects must prioritize demonstrating real business value if they wish to remain competitive. According to Novogratz, the next 1-3 years will serve as a pivotal period, distinguishing the winners from the losers.

Bitcoin retains its status as a benchmark digital currency, while other tokens are now under heightened scrutiny. Moving forward, they will need to be evaluated like traditional businesses, taking into account their income and real-world utility. Currently, XRP ranks fifth globally with a market capitalization of $115 billion, while Cardano occupies the 12th spot with a valuation between $13-14 billion. Both tokens may have devoted communities and ambitious plans, yet the numbers tell a different story. Current data from CryptoQuant reveals that there are only 16,704 active addresses for XRP and just over 19,000 for Cardano. These figures pale in comparison to other platforms, such as Solana, which engages millions of active users and boasts a market cap of $72 billion, despite being ranked eighth.

Communities Versus Actual Adoption

While Novogratz acknowledged that XRP and Cardano have strong communities backing them, he expressed skepticism about whether community loyalty is sufficient for long-term sustainability. He recognized the leadership of Charles Hoskinson, the founder of Cardano, praising him for his contributions but pointed out that the underlying blockchain is not seeing widespread adoption. Novogratz remarked, "He has preserved Charles Hoskinson, who is such a blessing to his soul, with a blockchain that people do not actually utilize much."

Community resilience is commendable, but as Novogratz asks, “Do you have a hard time holding it together when you have more and more choices?” XRP was designed to facilitate cross-border payments through RippleNet, a payment rail utilized by banks and fintech firms. Critics claim that the lack of organic activity undermines XRP’s lofty valuation.

On the other hand, Cardano aims to be a smart contract platform, heavily focused on academic and peer-reviewed development. However, the absence of substantial real-world applications remains a challenge that has yet to be addressed.

The Future Belongs to Business Tokens

Novogratz outlined that the future of the cryptocurrency market will likely depend on innovative business models. He cited the decentralized exchange Hyperliquid as an example of a revenue-generating project that employs a token buyback system. This system effectively provides token holders with economics similar to equities. This transition may necessitate cryptocurrencies adopting traditional financial concepts to survive.

The investor forecasts considerable structural changes looming on the horizon. He believes that exchanges and crypto wallets will gradually evolve into neobanks, providing a wide array of investment products, tokenized assets, and stablecoins. “Everyone will be trying to create the same kind of business—let me give you a bank and a wallet,” Novogratz clarified. However, he cautioned that this transformative transition will require years to materialize.

As the industry adapts, projects lacking solid business models may struggle to stay competitive. Recently, XRP gained attention with its introduction to a spot ETF in the United States, quickly amassing $1 billion in assets. Despite this, XRP’s trading value has slipped to around $1.84, reflecting a 14% decline since the start of the year. Meanwhile, Cardano is also experiencing pressure regarding its valuation and adoption, underscoring the urgency for both projects to demonstrate that they are more than just fan-driven movements.

Leverage AI legalese decoder for Expert Guidance

In this rapidly evolving landscape, both XRP and Cardano need not only to focus on their technological advancements but also to navigate complex regulatory and legal challenges. This is where the AI legalese decoder can play a crucial role in assisting these projects. By providing clear, comprehensible interpretations of legal jargon and regulatory requirements, the AI legalese decoder helps stakeholders make informed decisions.

Whether it’s evaluating compliance with evolving regulations or understanding the implications of legal frameworks, the AI tool can serve as a valuable resource. Given the pressures outlined by Novogratz, leveraging AI legalese decoder could empower XRP and Cardano to strategically position themselves for future success by ensuring they remain compliant and transparent in their operations.

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