Cryptocurrency investor Mike Novogratz has expressed skepticism about the development of crypto-business amidst a persistent bear market, but still believes in the success of their company and the cryptocurrency space in the long term.
In an interview with the Financial Times, former Goldman Sachs partner and founder of Galaxy Digital said his company which was set up to act as a crypto merchant bank was faced with unprecedented difficulties that do not typically affect the traditional financial organizations.
In 2017 Mike Novogratz has spent 302 million dollars to build the Galaxy Digital. Currently, the assets of the company are $ 460 million that are managed from offices in London, Hong Kong and Tokyo. Not so long ago the company created its own trademark, and to date, sought to improve their position by means of a dual listing in Frankfurt.
However, the affairs of the Galaxy Digital did not always go so well. After the company raised $ 242 million through a listing on the Toronto Stock exchange in August last year, its shares have fallen by 37%. IIn the first quarter of 2018, the company's losses amounted to 134 million due to unrealised losses of $85 million on digital assets and trading losses of $13.5 million.
In the second quarter of this year Galaxy Digital showed more positive results: net income was $ 35 million due to unrealized gains from principal investments. In addition, the company to cut its trading losses down to $1.4 million.
Speaking to Financial Times, Novogratz said:
"2017 for our company was very fun, down to idiocy. But in 2018, we are faced with great difficulties. Building a business in a bear market is a very bad idea. Against the background of falling prices increases the level of anxiety of employees. Of course, such giants of traditional business, like Goldman Sachs, don't worry about it, because there’s not an existential threat out there".
Novogratz, consistently making bullish predictions about the price of bitcoin, in early November announced the resignation of the president of the Galaxy Digital Richard Tavoso and co-head of trading David Namdar. Explaining its decision to reduce staff, Novogratz said that the company is no longer working with small startups, because consulting services are now provided only to large institutional clients.
The Financial Times sources claim that the Galaxy Digital recently received a subpoena from U.S. regulators, but the company has not confirmed these rumors.
However, the Novogratz continues to be optimistic for the future of cryptocurrencies. He predicts that in the first quarter of 2019 institutional investors will cease to invest in the cryptocurrency funds and prefer digital assets.