While suffering a $76-million quarterly loss might be enough for a lot of investors to fold, one thing 2018 taught us is that the cryptocurrency market is not for the faint of heart.
And so, despite the $76.65 million loss Galaxy Digital Holdings suffered in the third quarter of 2018 – and $136 million in total trading losses through December – Mike Novogratz isn’t backing down, announcing on Jan. 2 that he’s investing an additional $5 million in his crypto merchant bank. Novogratz has purchased 7.5 million ordinary shares of the company (2.7 percent of total shares outstanding) for 7.42 million Canadian dollars, increasing his total stake in the company to about 79.3 percent.
Galaxy, which trades on the Toronto Stock Exchange’s TSX Venture Exchange, saw its stock rise 21.36 percent on news of Novogratz’s latest investment, as CoinDesk notes. It’s stock plunged 19 percent last year amid the massive crash in the cryptocurrency market.
Novogratz, a former Goldman Sachs partner and CIO of Fortress Investment Group’s macro fund, talked to Bloomberg in December about the rough year for Bitcoin and why he still believes in the future of the cryptocurrency market, admitting that when Bitcoin was surging toward 20,000 it had entered “speculative mania” and likened it to “a drug.”
However, Novogratz maintained in the interview that Galaxy is not changing its strategy despite the losses in the crypto space.
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. I keep telling my guys we’re a surfer getting ourselves in shape for when the next wave comes, and when the wave comes we’d better be the Laird Hamilton of crypto.
Novogratz put up $150 million of his own money to launch Galaxy – which was seen as a comeback attempt after flaming out at Fortress Investment Group – becoming one of the most prominent champions of Bitcoin in the process. He’s said that he has 10 percent of his net worth invested in the cryptocurrency space.
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