Galaxy Digital

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Galaxy Digital Holdings Ltd.
Galaxy digital-jpg.jpg
Founded 2018
Headquarters New York, NY
Key People Michael Novogratz, Founder and CEO; Rich Tavoso, President; Julie Coin, COO; Steve Kelso, Head of Europe
Employees 50-200
Products Digital asset trading services, asset management, investment mangagement
LinkedIn Profile
Website Galaxy Digital Home
Releases Company News

Galaxy Digital Holdings Ltd. is an investment company that seeks to institutionalize the digital asset and blockchain space, providing asset management, investing, advisory and trading services as well as making principal investments.[1][2] The company is listed on the TSX (Toronto Stock Exchange) Venture Exchange with the symbol GLXY.

Overview

Galaxy Digital was founded by Michael Novogratz in January 2018. Since then, it has entered into business arrangements with several companies to create institutional-grade cryptocurrency and blockchain products and services.[3]

That November Galaxy Digital announced it had hired Ian Taylor, former real estate banker from Goldman Sachs, to help run a new branch of Galaxy's business involving the tokenization of real estate.[4] The same month, Galaxy Digital reported a $76.65 million loss for Q3 of 2018.[5] Ten months later, in September 2019, in a recorded podcast interview Novogratz told The Block Crypto, "There’s a few different type of businesses that we’ve looked at helping raise capital for a mining project or for new venture businesses so there can be a capital raising." He also said, "We’re working on a really large real estate transaction that if it got done would be a big big deal for the whole space."[6] By November 19, 2019, the company had not publicly announced any real estate transactions.[7]

In January 2019, Galaxy participated in a Series B round of investment for Symbiont. The round was led by Nasdaq and Citigroup Inc.[8]

In late April 2019, referring to the battle of Winterfell in HBO's "Game of Thrones's" The Long Night, Novogratz told online cryptocurrency industry publication The Block Crypto that the final quarter of the previous year for the crypto industry “felt a little bit like watching Game of Thrones last night."[9] Novogratz disclosed a $97 million loss for the quarter bringing the full year loss to $272.7 million for 2018.[10]

On November 19, 2019, the company announced the launch of two new bitcoin investment funds open only to accredited investors and institutions: Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund. The funds will use Bakkt and Fidelity Digital Assets as custodians.[11] Novogratz told Bloomberg at the time, “You are seeing Bitcoin way outperform other coins right now, and I think that will continue until these coins start to get used for things. You also get more credentialed people -- there are probably 20 billionaires I could name that made their money outside of crypto and are in crypto now. Every speculative asset needs people to tell the story, and people are buying the story.”[12]

On February 13, 2020, CoinDesk reported that in January the company had laid off 15% of its staff, 13 employees. The cuts occurred throughout the company and no business operations were discontinued as a result of the cuts, according to CoinDesk. A spokesperson for Galaxy Digital declined to comment.[13]

In June 2020 Galaxy Digital and Bakkt announced a joint service where customers of Galaxy Digital's OTC trading desk can use Bakkt as a custodian without completing additional separate paperwork there. The reciprocal arrangement allows Bakkt customers to use Galaxy's OTC trading services without its usual paperwork.[14]

In a June 2020 interview, Novogratz told CoinDesk that the investment company's fortunes depended on increased adoption of bitcoin by institutional investors and investment advisors.[15] Galaxy Digital announced on June 16, 2020 that it would partner with CAIS, an NFA- and FINRA-registered alternative investment platform, with the goals of enhancing the educational resources spanning blockchain and digital assets available to investment advisors.[16]

The company announced on November 12, 2020 that it closed a $50 million round of new funding.[17]

Galaxy ventures

The company announced a joint venture with Block.one in late January 2018 to create a $325 million fund to develop the EOS digital ecosystem.[18] In June 2018, Galaxy Digital partnered with High Fidelity, an open-source distributed ledger virtual reality gaming platform.[19]

In July 2018, the company announced a partnership with BlockFi, a company that offers fiat currency loans to digital asset holders to collateralize their loans with crypto. Galaxy Digital invested $52.5 million in venture capital.[20][21] Later that month, the company announced that, mostly due to declining prices of crypto assets, it had lost $134 million in Q1 of 2018.[22]

Acquisitions

Galaxy Digital announced on November 13, 2020, that it had acquired two Chicago-based firms, Blue Fire Capital and DrawBridge Lending for undisclosed amounts. DrawBridge Lending, which offered structured products and provided loans collateralized by cryptocurrency, and its $150 million in customer money were to be integrated into Galaxy Digital's business. Blue Fire, a proprietary trading firm focused on cryptocurrencies, was to remain in Chicago and operate as a wholly-owned subsidiary of Galaxy Digital.[23]

In May 2021, Galaxy Digital agreed to buy the cryptocurrency custodian BitGo for $1.2 billion in cash and stock. Novogratz said that this acquisition was done in order to attract both individual and institutional customers, like traditional banks. The deal is expected to close in the fourth quarter of 2021.[24]

Mining services

The company announced on January 14, 2021, that it had launched a business line "committed to providing bitcoin miners with a comprehensive suite of financial services and products." It also said that it had begun its own bitcoin mining operation at a third-party hosted site, ostensibly competing with the miners the new Galaxy Digital Mining aims to serve.[25]

Key People

  • Michael Novogratz - Founder and CEO
  • Christopher Ferraro - President
  • Steve Kelso - Head of Europe

References

  1. Galaxy Digital. Linkedin.
  2. About Us. Galaxy Digital.
  3. About Us. Galaxy Digital.
  4. Novogratz's Crypto Firm Turns to Tokenization of Real Estate. Bloomberg.
  5. Mike Novogratz’s Galaxy Digital Reports $76 Million Q3 Loss. Coindesk.
  6. Galaxy Digital is advising on a "really large" real estate deal. The Block Crypto.
  7. Press Releases. Galaxy Digital.
  8. Nasdaq, Citi Join Novogratz in Funding Blockchain Firm Symbiont. Bloomberg.
  9. Galaxy Digital Posts Net Loss of $272.7 Million for 2018. CoinTelegraph.
  10. Novogratz’s Galaxy Digital Crypto Fund Lost $272.7 Million in 2018. CoinDesk.
  11. Galaxy Digital Launches Bitcoin Funds. PR Newswire.
  12. Mike Novogratz Wants to Bring Bitcoin to the 1% With New Funds. Bloomberg.
  13. Novogratz’s Crypto Investment Firm Galaxy Digital Shrinks Workforce 15%. CoinDesk.
  14. Novogratz’s Galaxy, Bakkt Start ‘White-Glove’ Bitcoin Service. Bloomberg.
  15. Novogratz: Galaxy Digital Will ‘Suck’ if Bitcoin Fails to Become an Institutional Asset. CoinDesk.
  16. Galaxy Digital and CAIS partner to provide financial advisers with institutional-quality digital assets access and education. Wealth Adviser.
  17. Galaxy Digital Announces Closing of $50 Million Financing. Newswire.
  18. Block.one and Mike Novogratz’s Galaxy Digital Announce Joint Venture for New $325 million EOSIO Fund. Block.one.
  19. High Fidelity Raises $35M to Bring Virtual Reality to 1 Billion People. High Fidelity.
  20. We are elevating these lending markets to a level of sophistication that meets the rapidly changing needs of retail investors and institutions. BlockFi.
  21. BlockFi Raises $52.5 Million with Galaxy Digital Ventures LLC. High Fidelity.
  22. Crypto Bank Galaxy Digital Loses $134 Million in Q1. Coindesk.
  23. Galaxy Digital Expands Global Crypto Trading Business with Acquisitions of DrawBridge Lending and Blue Fire Capital. Newswire.
  24. Galaxy Digital to Buy BitGo in Crypto Sector’s First $1 Billion Deal. WSJ.
  25. Galaxy Digital Launches New Business Unit Dedicated to Mining, Establishes Proprietary Mining Operation. Newswire.