In a notable shift of perspective, Mike Novogratz, the CEO of Galaxy Digital, recently presented an unexpected, yet insightful, bull case for XRP during an appearance on Kyle Chassé’s podcast. Novogratz, a prominent figure in the cryptocurrency space, articulated a nuanced argument that deviates from conventional valuation metrics, positing that XRP's current value is underpinned less by its immediate on-chain utility and more by the extraordinary resilience and identity-forming power of its community. This community, he highlighted, has not only weathered significant legal challenges and tumultuous bear markets but has also consistently defied skepticism from its detractors, showcasing an unparalleled level of dedication.
“XRP has one of the strongest communities there is. You want to learn about it, say something bad about them,” Novogratz remarked, underscoring the fervent loyalty of XRP enthusiasts. He elaborated, "People will be out in front of your house with picket signs protesting you. Those community members love their token. They have a narrative, it’s going to be payments…” While acknowledging that present-day on-chain activity for XRP might lag behind faster networks like Solana, Novogratz asserted that such metrics are not the primary drivers of its current valuation. Instead, he argued, the asset's "value proposition is the intensity of that community," suggesting a profound influence of collective conviction over raw transactional volume.
The Unconventional Bull Thesis: Community as the Core Value
Novogratz framed the remarkable intensity of the XRP community as a rational response to a broader societal phenomenon: the erosion of trust since the 2008 financial crisis. In an environment where traditional institutions are viewed with increasing skepticism, individuals are actively seeking new forms of trust and affiliation. “We have so little trust that we’re finding trust in these online crypto communities,” he explained. He provocatively described the most successful crypto ecosystems as "cults" in a sociological sense—communities driven by shared convictions, where collective identity and a common narrative effectively substitute for institutional trust. "All the crypto that are successful are cults," he stated, illustrating this commitment with observations such as people getting tattoos of their preferred crypto assets, a level of personal identification rarely seen with conventional stocks.
Beyond Traditional Investment Models: Loyalty vs. Price Discipline
The Galaxy CEO drew a sharp contrast between the disciplined, price-sensitive approach of equity investors and the tribal loyalty often observed within crypto communities. “I’m an Oracle guy. I like Oracle when it’s cheap. I don’t like it when it’s expensive,” he noted, emphasizing the pragmatic, value-driven decisions in traditional markets. This stands in stark opposition to the unwavering stance of the "XRP Army," who, according to Novogratz, "just want to be in XRP" regardless of its price. He extended this identity-driven logic to Bitcoin, citing an employee whose purpose in life seemed inextricably linked to Bitcoin's existence. This phenomenon, he suggested, isn't exclusive to crypto, pointing to Tesla’s fervent fanbase as a parallel example, confirming Chassé’s analogy: "Tesla, because it’s become a cult. It’s a community. It’s a cult." This bleed-through across market types, in Novogratz’s view, signals that culture can indeed overshadow traditional valuation models for extended periods, making crypto assets whose communities behave as movements particularly resilient.
Resilience Through Adversity: XRP's Legal Saga as a Case Study
XRP's arduous journey through US litigation became Novogratz's central example of community resilience and enduring value. He confessed, “I didn’t think XRP would last after the lawsuits and all the… It did. And it’s stronger. It’s actually been the best token you could have bought post-election.” This "almost irrational" phenomenon, he posited, offers crucial lessons on the perils of dismissing the power of a dedicated community. He specifically commended Ripple’s CEO, Brad Garlinghouse, for his "world-class job of navigating these lawsuits, of keeping that community…” demonstrating how effective leadership can galvanize and sustain such a committed base, even under immense regulatory pressure.
Revisiting Decentralization Purity Tests
Novogratz also used this platform to critically re-evaluate his own preconceived notions about decentralization purity tests within the crypto space. “I used to get angry about it because I was like, oh, it’s not Bitcoin. It’s not as decentralized… Like, who am I to judge where people want to store their money?” This introspective shift reflects a growing maturity in his perspective, advocating for a more inclusive view of diverse crypto ecosystems. He extended this principle beyond XRP to assets like Cardano, arguing, “If people want to store their money in that community, go for it… The arrogance of thinking my community is good, but your community sucks. It’s just stupid. Now, I can make technical arguments for more decentralized than you… Like, who cares? No one cares.” This suggests a recognition that different communities serve different purposes and attract varying forms of loyalty, rendering rigid technical judgments less relevant to overall success.
Crypto Communities as Digital Polities
For Novogratz, crypto communities transcend mere investor groups; they function akin to independent polities. “They each have their own constitution, Declaration of Independence. They each have their own culture,” he asserted, highlighting the distinct governance and cultural frameworks that define each successful crypto project. He vividly illustrated this point with a personal anecdote about Galaxy’s office décor: “We have the Bitcoin white paper on our freaking ceiling… like the beginning [crawl] in Star Wars… That is the constitution of the Bitcoin community.” The implication for XRP is clear: as long as the "constitution"—the shared ethos and narrative—of its community remains robust, particularly having been forged and solidified under the intense scrutiny of legal battles, the token’s fundamental bid can be sustained as much by collective identity and unwavering belief as by its immediate functional utility. This perspective suggests that the long-term viability of many crypto assets may increasingly depend on the socio-cultural strength of their supporting communities rather than solely on technical specifications or current adoption rates.
When Kyle Chassé briefly brought up retail investor perceptions, noting that “people think XRP is very cheap at $3 because if it gets the same price Bitcoin’s at one day, imagine the upside,” Novogratz reiterated his stance against judging individual monetary choices. “When people thought I was crazy, I was like, who the freak are you to judge where I want to… save my money?” This reinforces his overarching message of embracing diversity in investment philosophies and respecting the autonomy of distinct crypto communities. Ultimately, Novogratz's surprising endorsement of XRP serves as a powerful testament to the evolving understanding of value drivers in the digital asset space, signaling a paradigm shift where community, identity, and resilience are increasingly recognized as formidable components of an asset's enduring worth.
