Billionaire investor Mike Novogratz has issued a stark warning regarding the future of Cardano and Ripple”s XRP. In a recent discussion, he asserted that both of these large-cap cryptocurrencies, which heavily rely on their dedicated communities, must distinguish themselves through real-world applications or risk becoming obsolete in the competitive landscape of digital assets.
According to Novogratz, community support alone is insufficient to ensure long-term success in an ever-evolving market. In his view, it is crucial for these projects to showcase tangible utility in order to navigate the upcoming market cycles effectively. During a conversation with Alex Thorn, Head of Firmwide Research at Galaxy Digital, Novogratz highlighted a significant shift within the cryptocurrency sector, emphasizing that the focus is moving away from tokens driven primarily by hype toward those demonstrating solid market fundamentals.
He noted that only those tokens capable of generating profits and providing substantial value are likely to endure, whereas those that rely solely on community enthusiasm may fade after their initial excitement wanes. While he acknowledged the unwavering support of the XRP community during the prolonged legal battle with the SEC as a sign of strength, he expressed skepticism about their long-term viability without demonstrable utility.
“Because the moment you”re not money, Bitcoin is money, then you”re just a business. The valuations are a lot lower,” Novogratz remarked. He also reflected on the leadership of Charles Hoskinson, the founder of Cardano, noting that while he has maintained a loyal community, the actual usage of the Cardano blockchain remains limited. Novogratz posed the question of whether such loyalty can persist in an environment with increasing alternatives.
To illustrate his point, Novogratz cited Hyperliquid, a decentralized exchange that has implemented a model of burning a significant portion of its profits by repurchasing and destroying tokens. He described this approach as creating an investment similar to equity, suggesting that this model may represent the future of effective token utility. “I think that”s the future of tokens,” he stated. “You”re going to see good tokens trade well, just like good real-world assets.”
Looking ahead, Novogratz predicts that the cryptocurrency industry is entering a transformative phase that could last between one to three years. He anticipates that wallets and exchanges will evolve into neobanks, offering a range of services including stablecoins, tokenized equities, and various financial products.
