/Novogratz: Trying to Start a Bitcoin Business in This Market Climate Sucks

Novogratz: Trying to Start a Bitcoin Business in This Market Climate Sucks

mike novogratz cryptomike novogratz crypto

Crypto investor Mike Novogratz has expressed dissatisfaction with the level of difficulty involved in trying to build a cryptocurrency business amidst a persistent bear market, even as he remains bullish on the prospects of his company and the wider crypto space in the long term.

Speaking to the Financial Timesthe former Goldman Sachs partner and founder of Galaxy Digital revealed that the company, which was set up to act as a crypto merchant bank has to contend with a unique set of challenges when compared to traditional merchant banking.

“Existential Threat”

Launched in 2017, Galaxy Digital received some $302 million in investment from Novogratz and it currently manages about $460 million in assets across three offices in London, Hong Kong and Tokyo. After setting up a trading arm recently, the company is also looking to raise funding and improve its profile with a dual listing in Frankfurt.

A look below the surface, however, reveals an altogether different reality, with the company’s shares having dropped a massive 37 percent since its August debut on the Toronto Venture Exchange in a listing that raised $242 million. It also recorded losses of $134 million in Q1 2018 due to unrealised losses of $85 million on digital assets and trading losses of $13.5 million.

Q2 did, however, produce better results, with $35 million in net income driven by $44.8 million in unrealised gains from principal investments. It also managed to cut its trading losses down to $1.4 million.

Speaking to FT about his thoughts on the situation, Novogratz said:

“2017 was just fun, it was almost stupid. [But] this year has been challenging. It sucks to build a business in a bear market…[Staff] anxiety levels go up when crypto goes down…In most traditional business, [such as] Goldman Sachs, you don’t worry. There’s not an existential threat out there.””

Trouble for Novogratz and Galaxy Digital

Known for making consistently bullish predictions about the price of bitcoin, Novogratz is reportedly navigating a mini-crisis at Galaxy Digital which earlier this month announced the departure of company president Richard Tavoso and co-head of trading David Namdar., citing a pivot away from consulting for smaller startups to working with large institutional clients.

FT sources claim that the company’s advisory business has received a subpoena from U.S. regulators, but this has not been confirmed by Galaxy.

On his part, Novogratz continues to make bold predictions about the future of cryptocurrencies, predicting that 2019 will see institutional investors move away from investing in crypto funds to crypto assets directly before the end of Q1.

Featured image from Youtube.

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