Novogratz’s Galaxy Digital Raises $250M For Crypto Lender Fund

Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, is reportedly raising $250 million to expand operations through a credit fund focused on lending crypto firms. This marks a huge institutional investment in crypto asset-backed loans which is noteworthy given the prolonged bear market.

Galaxy Digital plans to help Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term firms who can collateralize the loan with their “cryptocurrency assets, properties, and even machines that mine Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term,’ Business Insider reports.

The company’s product lends money to cryptocurrency holders who don’t want to offload their holdings but also don’t necessarily want so much of their assets tied up in digital coins.

Galaxy Digital, which is headquartered in New York, said it has been able to prove to investors that there is significant demand for crypto-to-USD lending. Customers of the new fund will range from blockchain startups to miners who are looking for fast and affordable access to real money without having to sell or trigger taxable events.

Nevertheless, Galaxy Digital itself took a $41 million hit in the Q3 2018 as bitcoin, and other cryptocurrencies continue to struggle. In its latest financial disclosure, the New York-based firm reported a net loss of $136 million during the nine months through September 2018. This figure includes unrealized losses on crypto holdings which were caused by weak trading volumes and losing trades on Ether, Bitcoin, and XRP.

Investment in Other Crypto Startups

Michael Novogratz, a former Goldman Sachs macro trader, launched the company in November 2017 and contributed $300 million of his own assets just a month before bitcoin peaked near $20,000. He also worked previously as CIO of Fortress Investment Group’s macro fund.

Earlier last year, a regulatory filing revealed that Galaxy Digital had over $280 million in assets as of the third quarter.

Despite the loss, Novogratz said earlier this year he still has “complete confidence” in the team’s ability to drive growth and that Galaxy is “strategically positioned to help further institutionalize the digital assets and blockchain industry.”

Novogratz has long been bullish on cryptos and blockchain. As part of his growth plans, Novogratz and his venture capital arm Galaxy Digital Ventures LLC participated in the latest $15 million funding round in cryptocurrency wallet provider BitGo.