When the former Wall Street powerhouse, Mike Novogratz, took a gamble on a new cryptocurrency venture, Galaxy Digital Galaxy Digital Holdings Ltd., many considered him ahead of his time. However, recent fiscal reports indicate that the firm, which operates as a dynamic crypto merchant bank, hasn't been performing well.
Galaxy Digital Isn’t Doing Too Hot
The listing of Galaxy Digital on the Toronto Stock Exchange (TSXV) last year was a mixed blessing. On one hand, it opened doors to public funding and raised its profile, but it also obligated the firm to release detailed financial reports. Recently, press release published Monday , the company headquartered in New York, disclosed its final quarter financials for 2018.
While Galaxy made bold moves in the last quarter, investing hefty sums in BitGo, Bakkt, and Galaxy EOS VC among others, they suffered a $97 million loss, escalating from $76.7 million in the third quarter. The filings suggest this financial dip stemmed primarily from their core investments and trading, likely affected when Bitcoin and other cryptocurrencies hit record lows in November and December.
To sum up, the company, significantly funded by Novogratz whose wealth is reportedly 20% tied up in Bitcoin and Ethereum, endured a $272.7 million loss throughout 2018. Ouch. As outlined in the filings, these losses originated either from selling off crypto assets or paper losses, implying the firm retains substantial digital assets. Evidence suggests they hold 9,724 Bitcoin, 94,525 Ethereum, 2.4 million EOS, and 60,227 Monero, with an approximate value just shy of $50 million by the end of Q4.
Despite these setbacks, Galaxy isn't entirely down for the count. The financial statement divulged that by the close of Q4, Galaxy possessed $350 million in assets, half in equity stakes within leading industry startups. Putting financials aside, Novogratz, the ex-Goldman Sachs partner, remains optimistic. As detailed in a press release, he shared:
\"The year 2018 was tough for the cryptocurrency sector, yet I commend our team’s ability to navigate through pressing market conditions and feel confident in our strategic positioning for future growth. We’ve leveraged our capital base to both pinpoint and back distinctive opportunities while continuously developing a robust institutional platform.\"
Novogratz, previously of Wall Street fame, adds that the financials haven't captured the \"significant uptick in activity across\" Galaxy’s operations early in 2019, predicting this will fuel the company’s forward momentum with renewed vigor.
Novogratz’s optimistic sentiment towards Bitcoin endures.
Despite the underwhelming year financially for his firm, Novogratz remains firmly optimistic regarding Bitcoin and broader digital currencies. In a February tweet, he expressed that although he doesn't expect cryptocurrency markets to ascend immediately, institutional interest will emerge owing to the 'abundant underlying activity.'
Reflecting on recent crypto musings, it’s been a slog. Don't anticipate heading north for at least a few more months. Institutional shifts take time but they will happen. Significant underlying activity exists. Stay the course.
— Mike Novogratz (@novogratz) February 1, 2019
Addressing Bitcoin’s prospects directly, the investor emphasized his unwavering belief in BTC's potential as digital gold. According to reported Blockonomi, he asserted that just as every chemical element matches an atomic number, Bitcoin Bitcoin stands alone as the single credible store of value amidst cryptocurrencies. He argues that Bitcoin’s economic framework, particularly its cap of 21 million coins paired with a deflationary distribution pattern, and its divisible, global transaction capacity, make it a transformative monetary marvel.
