Galaxy Digital Holdings has lost $136 million in nine months, according to Bloomberg. However, that hasn’t dampened the spirit of founder Mike Novogratz who says he is “all-in” on crypto.
Novogratz, a former trader at Goldman Sachs and Fortress, says his strategy as head of the company hasn’t changed despite the market massacre. “We have a business that we think can break even next year, if not make money. We’re not nervous; we’re frustrated that our investors have lost money. We’ve got plenty of cash to run the business for a long time.”
Galaxy Digital is a merchant bank specializing in digital assets and blockchain. Services include digital asset management, trading, advisory services, and principal investments.
In the last nine months, the Galaxy Digital Holdings reported $136 million in losses, attributed to investments in XRP, bitcoin, and ethereum.
Novogratz points the finger at bitcoin cash for bitcoin’s latest drop below $6,000. He thought bitcoin “was going to hold at $6,200 […] but then bitcoin cash decided to fork again.”
Despite the ongoing bear market, Novogratz remains optimistic, affirming that bitcoin is “not going to zero.”
Billionaire trader Mike Novogratz said that he had shelved plans to launch a $500 million crypto hedge fund after the cryptocurrency markets entered a $180 billion tailspin on Friday.
Novogratz Shelves $500 Million Crypto Hedge Fund as Bitcoin Price Retraces
Novogratz, a former Fortress principal, had stated on Dec. 12 that he intended to launch Galaxy Investment Partners “by the end of the week,” rapidly moving up a timetable that had originally planned the fund’s launch for the first quarter of next year. With a $500 million target, the crypto hedge fund was expected to be the largest of its kind.
However, on Friday the long-time bitcoin bull revealed that he had not only not launched Galaxy Investment Partners last week as planned but had also shelved the crypto hedge fund indefinitely, according to a Bloomberg report.
“We didn’t like market conditions and we wanted to re-evaluate what we’re doing,” Novogratz said in a phone interview. “I look pretty smart pressing the pause button right now.”
The revelation of the abrupt reversal comes as the cryptocurrency markets have entered a severe correction following a parabolic run-up. After reaching an all-time high of $19,891 on Dec. 17, the bitcoin price plunged to a nearly three-week low of $10,700 on Friday morning, according to data from Bitfinex.
‘When Insiders Sell It Always Is Important’
Novogratz — who recently predicted that the bitcoin price would hit $40,000 in 2018 — said that he now believes the bitcoin price could retrace as far as $8,000 before resuming its bullish rally.
“Looks to me like a short-term top is in,” he wrote on Twitter. “My hunch is we consolidate between 10-16k for a while. Extreme would be 8k. Bull market isn’t over. Just pausing.”
Looks to me like a short term top is in. My hunch is we consolidate between 10-16k for a while. Extreme would be 8k. Bull market isn’t over. Just pausing.
Elsewhere on Twitter, he appeared to lay part of the blame for the correction on Litecoin creator Charlie Lee, who revealed earlier this week that — to avoid a “conflict of interest” — he had sold his entire LTC balance and donated the proceeds to undisclosed organizations.
“When insiders sell it always is important,” Novogratz said.
The co-founder of Yahoo is a big believer in bitcoin and thinks that in time it will become a global force for good when it’s treated like a currency.
Speaking on the sidelines of the Fortune Global Forum in Guangzhou, China, Jerry Yang, who leads venture capital fund AME Cloud Ventures, said to CNBC that:
Personally, I am a believer in where digital currency can play a role in our society, not only in the front end of doing transactions, but also in the back end of creating a more efficient system and a much more verifiable system. For now, it seems like it’s more driven by the hype of investing and getting a return rather than using it as a transaction currency.
Thursday saw bitcoin’s price reach a significant milestone of over $16,000 for the first time, pushing its market cap to an impressive $270 billion, according to BlockExplorer’s Market Cap.
This rise in value comes at a time when several promising factors are due to take place later this month, namely the launch of Cboe Global Markets and the CME Group’s bitcoin futures contracts. Last week, the two received regulatory approval from the U.S. Commodities Futures Trading Commission (CFTC), enabling investors to trade in the digital asset via a regulated market.
Yet, while Yang is optimistic of bitcoin’s future, there are plenty who remain cautious of it.
Dennis Gartman, often referred to as a ‘commodities king’ said this week that while the launch of the futures trading will bring ‘some sense of legitimacy’ to the digital currency he’s still not buying into it.
Interestingly, billionaire hedge fund manager and bitcoin bull Mike Novogratz recently expressed his worries about bitcoin’s rising value. As reported yesterday, Novogratz said that nervous regulators could attempt to cool the market with the introduction of regulations on digital currencies.
One of the big risks out there right now is that prices are moving so fast that regulators are going to get nervous,” he said. “I could legitimately see bitcoin go $13,000, $14,000, $20,000, $25,000 and see somebody balk.
For now, though, regulators appear to be more intrigued with the cryptocurrency market, with several countries, such as Japan, accepting it as a legal form of payment. Last month, the former Fortress manager projected that bitcoin could ‘easily‘ reach $40,000 by the end of 2018. He also said that ethereum could experience a threefold gain in the same time.
Legendary hedge fund manager and cryptocurrency bull Mike Novogratz is concerned that the surging bitcoin price could cause nervous regulators to attempt to cool down the markets by imposing regulations on cryptocurrency usage.
Novogratz, a former Fortress principal who is currently preparing to launch a $500 million crypto-asset hedge fund, stated on CNBC’s “Power Lunch” that he is not concerned by the price itself — he has predicted that bitcoin could “easily” reach $40,000 by the end of 2018 — but rather that the rapidity of its climb will encourage regulators to take a more active role in overseeing the markets, perhaps by placing new rules on cryptocurrency usage.
“One of the big risks out there right now is that prices are moving so fast that regulators are going to get nervous,” he said. “I could legitimately see bitcoin go $13,000, $14,000, $20,000, $25,000 and see somebody balk.”
Until now, he said, regulators in most parts of the world have been relatively accommodating of bitcoin. Although many in the community have bristled at regulations such as New York state’s notorious BitLicense, Novogratz said that most regulators have been working with bitcoin — rather than against it.
That may change, however, if the bitcoin price continues to rise at a breakneck pace and regulators begin to perceive it as a threat to the stability of the domestic economy.
“I’ve got concern that if price movements go higher we’re going to get more regulation,” Novogratz said. But “I think it’s hard to shut down. … I don’t think that’s a probability.”
While the government has little power to regulate the Bitcoin network itself, regulators could make life difficult for bitcoin users, and more significantly — businesses that engage with cryptocurrency or provide services to bitcoin users.
In the short-term, a hostile regulatory stance could render bitcoin even more volatile than it already is and potentially lead to a severe price correction. Nevertheless, as Novogratz pointed out, cryptocurrency usage is not isolated to one geographic region, limiting the ability of regulators to curtail its ascent.
“We’re in a speculative frenzy. Period. Stop. How long can it go? who knows,” Novogratz concluded, contrasting the rise of bitcoin with the dot-com bubble of the late 1990s, which he says was largely a U.S. phenomenon. “What’s interesting about this is it’s global”.
Hedge fund legend Mike Novogratz predicts that the bitcoin price could “easily” reach $40,000 by the end of 2018, while ethereum is poised to experience a threefold gain during the same timeframe.
“Bitcoin could be at $40,000 at the end of 2018. It easily could,” the former Fortress manager said Monday on CNBC’s “Fast Money,” noting that the asset has significant upside due to its utility as “digital gold”.
Mike Novogratz on Bitcoin
Previously, Novogratz had forecast that bitcoin would reach $10,000 by the end of 2017. Although the global average bitcoin price had not quite broached that threshold at the time of writing, bitcoin had reached the five-figure mark on several South Korean exchanges.
Bitcoin has increased more than 1,200 percent for the year, and Novogratz believes that rally will continue into 2018 — albeit at a somewhat more conservative pace — on the heels of increased institutional activity within the crypto markets.
“There’s a big wave of money coming, not just here but all around the world,” he said.
Novogratz aims to facilitate that wave through Galaxy Investment Partners, a $500 million crypto asset hedge fund he is launching next year.
He expects that the introduction of these new market participants could help bitcoin “easily” reach $40,000, which would raise its market cap to approximately $670 billion.
But although bitcoin will remain the “crypto king,” Novogratz believes other cryptocurrencies — including ethereum — will catch its tailwinds and experience phenomenal growth as well.
“Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well,” he added, predicting that the second largest cryptocurrency could see a threefold increase from its present level.The ethereum price reached a new all-time high of $493 on Monday and is currently trading at $477 on U.S. exchange Coinbase.
However, he cautioned that although the market’s present upward trajectory will continue, so will its volatility, and he said that he would not be surprised if the markets experience a steep correction in the short-term.
“What’s different about these coins than other commodities … there is no supply response here,” Novogratz said. “So it’s a speculator’s dream in that as buying happens there’s no new supply response that comes up. So every price move gets exaggerated. It’s going to get exaggerated on the way up. There will be 50 percent corrections. It will get exaggerated on the way down.”
Nevertheless, Novogratz believes that the market’s fundamentals will resist these bearish hesitations, enabling the combined value of all cryptocurrencies to rise as high as $2 trillion in 2018 from their present value of $300 billion.