(Bloomberg) -- Michael Novogratz said he sees signs of increased participation in cryptocurrency markets by more traditional institutional investors in the wake of the turmoil in the digital-asset world last year. 

“Institutions have come back some in the immediate term. They’ve come back in futures. They’ve come back in some of these stocks. But importantly, they’re coming back in structural ways,” Novogratz, the founder and chief executive officer of Galaxy Digital Holdings Ltd., said on the New York-based company’s second-quarter earnings conference call Tuesday. 

He pointed to PayPal Holdings’ launch of a stablecoin on Monday and Deutsche Bank’s application for crypto custody services as examples. Prior to the collapse of the FTX exchange, many institutions, such as college endowments, pension funds, and asset managers, “got to the starting line, and then they all backed away,” he said. 

Stablecoins are a growth area in crypto globally, Novogratz said. With PayPal’s entry, “they could end up creating a stablecoin that gives interest - which right now would be a security - that really destabilizes the banks.”

PayPal doesn’t offer yield on its stablecoin currently, and a spokesperson from the company declined to comment on future plans. 

Read More: PayPal Launches a Stablecoin in Latest Crypto Payments Push 

On Tether, Novogratz said he doesn’t believe there’s “any significant risk or any real risk of a big run on Tether, which sometimes just scares the market.”  He has “high confidence” that Tether, the biggest stablecoin with a $84 billion market value, has enough assets to pay for liabilities, though there could be some “skirmishes around the sidelines,” given Tether’s opaque operations offshore. 

Galaxy, a crypto financial services firm, reported its second-quarter loss narrowed while cryptocurrency prices stabilized. The firm reported net loss of $46 million, or 14 cents a share, compared with a loss of $554.7 million a year ago, or $1.74, a year earlier. 

“Galaxy’s operating businesses performed well in the second quarter against a backdrop of continued uncertainty and regulatory pressure,”Novogratz said in a statement. 

Galaxy, which offers businesses ranging from crypto trading and asset management to mining, reported trading revenue of $59.5 million in the quarter, a 54% decrease from the first quarter. The company said its counterparty trading volume was impacted by the industry-wide slowdown in crypto trading activity.

Its asset management revenue was $33.8 million in the quarter, a 619% increase from a quarter ago, driven primarily by higher net realized gains on investments from venture platform. Galaxy has initiated an application for BitLicense, which will allow it to serve clients in the state of New York.

Shares of Galaxy declined for a fifth day, falling 3.4% to $4.54 as of 10:24 a.m. in New York. The stock has risen 59% this year.

(Adds commentary from Novogratz from earnings call, beginning in the first paragraph.)

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