Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, has expanded its operations and investment portfolio with the acquisition of two cryptocurrency trading firms. Novogratz’s brainchild has bought crypto lender, DrawBridge and proprietary trading firm, Blue Fire Capital.
To emphasize his convictions about the takeover, Galaxy Digital founder said the new deals further expand their trading’s revenue-generating activities while diversifying business lines. Specifically, the buyouts expand Galaxy’s offering beyond its OTC trading to delve into derivatives and futures trading, on-exchange market-making, as well as lending, borrowing and structured products.
“Institutional investors and corporates are becoming more knowledgeable and comfortable with digital assets, and they are increasingly grasping the purpose and importance of cryptocurrency in their investment strategies. We are looking forward to seamlessly integrating DrawBridge and Blue Fire into Galaxy Digital Trading and strategically leveraging our world-class team, technology and solutions to help further meet what we believe will be an even bigger wave of institutional demand,” said Michael Novogratz, Founder and CEO of Galaxy Digital.
Founded in 2017, Blue Fire Capital is a privately-owned company that provides two-sided liquidity for futures markets and digital assets. The combination of its trading strategies and execution with Galaxy Digital’s sources of liquidity further enhances relationships with global crypto exchanges. Blue Fire’s $36 billion of annual derivatives trading volume also creates a strong regional hub in Chicago for Galaxy Digital to expand agency, prime brokerage and electronic trading services.
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DrawBridge Lending, which has more than $130 million in AUM, offers a suite of crypto investing and money management solutions, including cash loans secured by crypto and investment funds. The company is licensed in the US to offer loans in US dollars to qualified borrowers who apply the due diligence process, including institutions, cryptocurrency miners and investors.
The acquisition allows DrawBridge to scale lending and structured product offerings in crypto via Galaxy Digital’s institutional market relationships while adding its $150 million third-party assets to the combined firm.
Galaxy’s trading business covers a basket of digital assets and also runs an OTC sales desk to facilitate trades on behalf of institutional investors. 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 the CIO of Fortress Investment Group’s macro fund.