Steve Kurz's 'Great Convergence': Crypto's Path to Mainstream Finance

Steve Kurz, Global Head of Asset Management at Galaxy Digital, has coined the term 'Great Convergence' to describe cryptocurrency's deepening integration into traditional financial systems. In Galaxy's 2026 investment outlook, Kurz argues that crypto is evolving from a speculative asset to a core component of global finance infrastructure. This shift is marked by robust advancements in custody solutions, compliance standards, and seamless connections with legacy finance, even as token prices face short-term corrections.

Kurz views recent market selloffs not as systemic failures but as healthy liquidity unwinds driven by deleveraging. Stablecoin supply hit a record $311 billion in January 2026, fueled by institutional capitalincluding a Trump-backed initiativedemonstrating commitment to crypto's foundational rails. Galaxy Asset Management itself saw over $2 billion in net inflows in 2025, underscoring investor confidence in this maturation.

Institutional adoption is the cornerstone of Kurz's thesis. Unlike retail-driven volatility, capital now flows through established channels like ETFs and regulated funds. However, 2026 has seen modest ETF outflows ($32 million) amid underperformanceIBIT up just 2.2% year-to-datewhile gold surged 23% and speculative interest pivoted to quantum computing. This divergence highlights a bifurcated market: deepening crypto infrastructure investments contrast with rotations elsewhere.

Galaxy Digital is positioning aggressively. Kurz discussed at the Bank of New York Mellon conference how crypto must now compete at institutional scale, with regulatory U-turns failing to deliver expected Bitcoin rallies. Improvements in broker-dealer integrations by firms like BlackRock and WisdomTree signal broader distribution channels ahead. Galaxy's launch of a fintech hedge fund reflects bets on winners in real-world assets (RWAs) and beyond.

• Stablecoin market cap: $311B all-time high, institutional-driven.
• Galaxy inflows: $2B+ in 2025.
• ETF challenges: Outflows amid weak YTD returns.

Kurz emphasizes that crypto's dual roleas an asset class and technology stackfuels sustained growth. Post-unwind, markets are entering a range-bound phase dominated by institutional settlement rails, paving the way for gradual appreciation. For investors like Commonwealth Fusion Systems' backersincluding Galaxy Interactivethis convergence extends to fusion energy and other innovations, but crypto remains the focus.

Humans at the helm, such as Kurz and Galaxy founder Michael Novogratza Wall Street veteran turned crypto pioneerare steering this transition. Novogratz's journey from traditional finance to digital assets mirrors the broader industry's pivot. Kurz predicts massive gains in later phases of RWA tokenization and fintech integration, though early winners remain unclear.

While bullish, Kurz acknowledges hurdles. Crypto ETFs lag due to distribution lags and competition from assets like gold. Yet, Galaxy's infrastructure expansionsfrom asset management to Solana treasury initiatives with Jump Trading and Multicoin Capitalposition it to capture value. Partnerships like Lion Group's with Galaxy and Autonomous bolster digital asset strategies.

The 'Great Convergence' signals a healthier, less speculative crypto ecosystem. Traders and institutions alike stand to benefit as crypto sheds its bubble image, integrating into portfolios worldwide. Kurz's outlook urges focus on structural trends over daily fluctuations, offering a roadmap for 2026 and beyond.