Novogratz Pushes Ahead With Plans for Cryptocurrency Merchant Bank
Mike Novogratz has raised $250 million for a crypto merchant bank, after backing out of a $500 million crypto hedge fund he announced last year.
Billionaire Bitcoin bull Mike Novogratz has reportedly raised $250 million for Galaxy Digital, his New York-based crypto merchant bank.
As per a report by Bloomberg, the funds have been raised privately, as opposed to via ICO. The investors have, essentially, bought shares in Galaxy Digital via a separate holding company, which will allow Galaxy Digital LP to get publicly listed in Canada and trade on the TSX Venture Exchange, without having to disclose the investments.
The move comes as a positive development for the crypto market as a whole, since Novogratz’ crypto merchant bank will facilitate asset management and provide advice on blockchain ventures, in addition to trading cryptocurrencies.
Interestingly, Novogratz had announced plans for a cryptocurrency hedge fund last year, which was expected to be the biggest of its kind, with a capital of $500 million. However, he ended up delaying his plan in December last year, following Bitcoin’s sudden price drop during the holiday season – a move that he received a lot of flak for.
“We were supposed to launch on December 15th and we paused. I didn't like the market conditions as a starting point to take other investors' money,” he had explained.
Back then, Novogratz also mentioned a full merchant bank for crypto, and stated that he remained bullish in regards to the crypto market.
Now, it appears the former fund manager at Fortress Investment Group is moving ahead with his plans for a crypto bank, at a time when the market is in the process of recovering from a major correction which saw Bitcoin drop as low as $6,000.
The current scenario is being considered by many as an opportune time for investing in the digital currency, since it is currently trading at almost 70% lower than its record-breaking $20,000 high in mid-December. Although Novogratz was heavily criticized for backing out of his ambitious $500 million hedge fund plan last year, his investors are likely to be relieved in hindsight.