Galaxy Research Head Says Bitcoin Is A 'Veblen Good' — The Firm's Own Desk Is 50/50 On The Bottom

Galaxy’s trading desk says Bitcoin’s risk-reward is improving over the next 6-12 months, citing stronger ETF flows.

• Galaxy Digital research head pointed to growing institutional interest, saying the discussions around stablecoins, tokenization, and crypto trading are more than ever.
• Adoption is increasing, and more firms are thinking about Bitcoin security for the long haul, not just the near-term price action.
• That shift was evident in the formation of the Bitcoin Security Consortium, which saw Strategy, BlackRock, Coinbase, Galaxy and others pledge $15 million to post-quantum security research.

Alex Thorn, who leads research at Galaxy Digital (GLXY), says Bitcoin (BTC) works like a luxury product — the more expensive it gets, the more people want it. Right now, though, Galaxy's own trading desk can't agree on whether it's cheap enough to buy.

Speaking on the “Galaxy Brains,” Thorn described Bitcoin as one of the most reflexive assets on the market, comparing it to a “Veblen good,” an economic term for a good that becomes more desirable the more expensive it becomes. Bitcoin has “demonstrated that many times,” Thorn said.

That framing came as Galaxy’s trading desk debated whether Bitcoin’s current $63,000-$65,000 range was the bottom of the current cycle or just bear-market noise. In a conversation with Beimnet Abebe, Head of Credit Trading at Galaxy, Thorn said an internal poll across the firm’s trading, risk and research teams was dead even at 50/50.

Bitcoin’s Risk-Reward 

They said the risk-reward was becoming increasingly positive for investors over a 6- to 12-month horizon, citing a roughly one-year historical pattern for bottoms in the crypto cycle, better exchange-traded fund (ETF) inflow data after weeks of continuous outflows, and less “forced-seller” risk associated with Strategy after the company rebuilt its cash reserves.

GLXY stock closed down over 6% on Friday. On Stocktwits, the retail sentiment around GLXY shifted to the ‘neutral’ from ‘bullish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.

Institutional Adoption Strengthens The Bull Case

Institutional demand was also mentioned as an underappreciated upside. Conversations with major institutions on stablecoins, tokenized assets and trading have become “as pervasive as they’ve ever seen,” both domestically and abroad, the desk said. 

Dips were “meant to be bought” in today’s environment, Galaxy’s team said, citing increasing institutional engagement along with improving ETF flows as supportive factors for Bitcoin’s medium-term outlook.

Bitcoin’s price traded at the $64,000 level, down by 0.3% during the past 24 hours. On Stocktwits, the retail sentiment around BTC shifted to ‘neutral’ from the ‘bullish’ zone, while chatter around it remained at ‘low’ levels over the past day.

Bitcoin's Quantum Exposure

Industry players are turning their attention to the network's long-term resilience and security infrastructure as institutional adoption of Bitcoin deepens.

As companies like Strategy (MSTR), BlackRock (BLK), Coinbase (COIN), Galaxy (GLXY) and others launched the Bitcoin Security Consortium this week, the emphasis on infrastructure and risk management in the long term comes into focus. 

The group pledged a total of $15 million over three years for post-quantum security research, with Bitcoin’s vulnerability to quantum computing threats named as the first target area.

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