Galaxy Digital, one of the earliest and largest cryptocurrency merchant banks in the space, founded by billionaire Mike Novogratz, posted first quarter earnings. Published accounts suggest the firm has lost $134 million due to a combination of an extended bear market and the usual course of starting a large company. Many analysts wonder aloud what this means for the fate of institutional investment in crypto.
“I am very proud of the progress that we have made since the beginning of the year,” Galazy Digital CEO and founder, billionaire Mike Novogratz explained at a first quarter earnings call to investors. “We have assembled a world-class team with deep institutional knowledge and expertise and have also made significant strides in scaling our four core business lines. I have complete confidence in our team’s ability to continue driving growth and believe the Company is strategically positioned to help further institutionalize the digital assets and blockchain technology industry.”
Galaxy arrived on the public scene as one of the first crypto merchant banks, boasting of investors such as Mr. Novogratz. From January through March of this year, however, the bank appears to have lost around $134 million.
The report is in partial fulfillment of the bank eventually being listed on a Canadian exchange, Toronto TSX Venture Exchange. Analysts are indeed placing blame on the broader crypto markets, which have current prices reflecting over a 60% drop since Galaxy was founded late last year during record all-time highs for the sector.
Mr. Novogratz, formerly of Goldman Sachs, and a very successful hedge fund manager, famously poured $300 million of his own money into Galaxy. His plan is to purchase Coin Capital under provisions of a reverse takeover, along with shell company Bradmar Pharmaceuticals, to gain a trading seat on the exchange.