Why Crypto Prices Are Down While the 'Plumbing Bull Market' Heats Up

When Steve Kurz talks about a "bull market in crypto plumbing," he's not referring to your portfolio. The Galaxy Digital asset management chief oversees $12 billion in digital assets, and while Bitcoin hovers below $70,000 and altcoins bleed red, he sees something most investors are missing: the infrastructure revolution happening beneath the surface.

The Great Disconnect

Here's the puzzle that's keeping institutional investors awake: crypto prices are down roughly 40% from their peaks, yet business activity in the infrastructure layer remains robust. Stablecoins continue growing, tokenization projects multiply, and traditional banks quietly integrate blockchain rails into their operations.

"The spread between price, sentiment and underlying business activity has never been wider," Kurz told CoinDesk. While retail investors obsess over charts, the real money is flowing into the boring stuff—custody solutions, compliance frameworks, and payment infrastructure that connects crypto to traditional finance.

Galaxy Digital itself exemplifies this trend. The firm provides technology and payments services to banks and fintech companies, positioning itself as a bridge between Wall Street and crypto's wild west. Their infrastructure business is doing more now than it was a year ago, even as token prices struggle.

This Isn't 2022 All Over Again

The current selloff feels different from the carnage that followed Terra Luna's collapse and FTX's implosion. Back then, structural flaws in a less mature ecosystem created systemic failures. Today's decline reflects what Kurz calls "healthy deleveraging"—a natural unwinding of leverage rather than fundamental breakdown.

The market now includes sophisticated risk management frameworks and institutional-grade infrastructure. When October's liquidity crunch hit, it didn't expose another Three Arrows Capital or reveal hidden insolvencies. Instead, it triggered an orderly deleveraging process that, while painful, demonstrated the ecosystem's improved resilience.

"Most of the dramatic selling has probably already occurred," Kurz believes. Rather than expecting a V-shaped recovery, he anticipates months of consolidation followed by gradual gains as institutional capital deepens.

Competing on Wall Street's Dashboard

Crypto's integration into traditional finance brings both opportunities and challenges. Digital assets now compete directly with gold, emerging tech themes like quantum computing, and other global macro plays. This means higher standards and more sophisticated capital allocation decisions.

Institutional allocators—pension funds, sovereign wealth funds, endowments—increasingly view crypto through a cyclical lens rather than as a speculative sideshow. Galaxy reports winning business across banks, wealth intermediaries, and institutional asset owners, facilitating capital inflows even during market consolidation.

The firm's new fintech hedge fund targets the "winners and losers of the great convergence," while Galaxy Ventures invests in early-stage companies building crypto-enabled financial services. It's a bet that the fusion of traditional finance and blockchain technology creates lasting value beyond token price appreciation.

The Infrastructure Opportunity

While traders chase the next meme coin, the real alpha lies in crypto's transformation from speculative asset to financial infrastructure. Public blockchains are increasingly viewed as institutional-grade rails for payments, settlements, and asset management.

This "asset-to-infrastructure transformation" represents what Galaxy calls the defining story of this cycle. The company positions itself across the entire stack—from onchain infrastructure to public markets and asset management—capturing both technological integration and asset financialization.

Kurz downplays existential fears like quantum computing threats, noting that periods of intense negativity often coincide with market bottoms. More concerning would be apathy—a loss of relevance in broader market conversations.

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