Crypto Merchant Bank Galaxy Digital lost $136 million between January and October 2018

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Galaxy Digital Holdings , a cryptocurrency merchant bank owned by
former Goldman Sachs macro trader Mike Novogratz, has revealed
that it lost $41 million in the third quarter of 2018 in an official
filing. According to a Bloomberg report on November 29, 2018,
the firm’s total realized and unrealized losses totaled to a
whopping $136 million for the first nine months of the year.
Similar to most other cryptocurrency-based businesses, Galaxy
Digital Holdings said that it lost numerous bets on Ethereum,
Bitcoin and Ripple’s XRP.

GOLDMAN SACHS OF CRYPTO

Novogratz founded the firm only a few years ago, funding the
project entirely out of his personal crypto reserves. Since then,
Galaxy Digital has been proclaimed as the ‘Goldman Sachs of
Crypto’, a nod towards Novogratz’s famed role as a partner at the
Wall Street investment firm.

In its report, Galaxy Digital said that poor pricing data, lack of
trading volume and a weak business sense were all factors to
blame for the company’s misfortune. They wrote, “While we
continue to improve and strengthen our trading business, lack of
overall trading volume in cryptocurrencies has been a headwind.”

However, the firm has still not proposed a remedy to its customers
and shareholders. This is likely why Galaxy Digital’s shares have
dropped by around 10 percent over the past 24 hours.
Making matters worse is that the firm’s report only includes
financial figures until the third quarter of 2018, specifically
September 30. Given that Bitcoin, and the rest of the
cryptocurrency market, has lost over 30 percent of its valuation in
the past week alone, it is rather unlikely that Galaxy Digital
Holdings will be able to make an emphatic comeback before the
year is over.

However, while the company has not churned out a great return
this year, it is important to recall that the meteoric rise of crypto
prices benefited the company greatly as well.

OPTIMISTIC PREDICTIONS.     

For Novogratz, however, the past year’s dismal returns are
already in the rearview mirror. Speaking with The Financial Times,
he expressed his belief that prices will improve in the coming
months, especially once financial institutions begin investing in
cryptocurrencies directly. “You’ll see that flip next year. That’s
when prices start moving again,” said Novogratz. Currently, most
institutions participate in an indirect capacity, by investing in
crypto-based hedge funds or other financial products such as
Bitcoin Futures.

Novogratz has developed a sizable reputation for his predictions
of the crypto market. In 2017, for instance, he publicly claimed that
Bitcoin could ‘easily’ reach $40,000 by the end of the next year. A
guest on CNBC’s Fast Money segment, he added, “Ethereum,
which I think just touched $500 or is getting close, could be triple
where it is as well.” However, the prices of bitcoin and Ethereum
hover around $4200 and $118 respectively, a mere fraction of
Novogratz’s original prediction.

On October 2018, however, Novogratz decided to take a more
cautious stand with his predictions and stated that Bitcoin would
not top or exceed $9.000 before the end of 2018. He went on to
justify the sudden price drops by claiming that people are selling
‘just to fund the burn rate of the industry.’

Source : https://btcmanager.com