Mike Novogratz's Crypto Bank Incurs $41 Million in Q3 Losses

Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, took a $41 million hit in the Q3 2018 as bitcoin and other 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 continue to struggle amid a prolonged bear market.

In its financial disclosure released this week, 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, the company said.

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

Investment in Other Crypto Startups

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 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 tampe 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 tampe Read this Term 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 funding round in cryptocurrency wallet provider BitGo.

Including the new funding, BitGo has raised $58.5 million for its Series B round, making it one of the most well-funded companies in the cryptocurrency industry. The company said it would use the new investments to accelerate the development of its “$1 trillion crypto wallet.”

The dismal results come as Bitcoin and other virtual assets have yet to find price footing this year. Earlier this week, the world's largest cryptocurrency hit its lowest point since September 2017 below the $3,500 handle. The entire market capitalization for cryptocurrencies has also plunged to $137 billion relative to nearly $800 billion in January, according to CoinMarketCap.com.