“Novogratz is putting substantially all of his crypto investments into Galaxy — about $400 million of bitcoin, ether, initial coin offerings and stakes in startups such as Xapo, Bitstamp and Ripple Labs.”
One month ago, cryptocurrency pioneer Mike Novogratz inexplicably shelved plans to launch a hedge fund just hours after the biggest crash in bitcoin in years due to South Korean crackdown concerns (from which it has since fully recovered), prompting many to ask if “Novo” had gotten cold feet on the entire space. This morning we get the answer, which is an empathic no, because as Bloomberg’s Erik Shatzker reports Novogratz – one of bitcoin’s most outspoken champions – is bypassing the hedge fund stage entirely, and instead starting a merchant bank dedicated to cryptocurrencies and blockchain-based ventures. And he intends to take it public.
As Bloomberg reports, the former Fortress manager laid out a series of transactions in a statement Tuesday that would, if successful, raise $200 million and, through a holding company, list shares of his Galaxy Digital LP on Canada’s TSX Venture Exchange. He said Galaxy is building a “best-in-class, full service, institutional-quality merchant banking business in the cryptocurrency and blockchain space” and will be active in four areas: trading, principal investing, asset management and advisory work.
While Novogratz had been planning the launch of a hedge fund, according to a Bloomberg source he also had been laying the groundwork for Galaxy for months. The fund, had he continued with it, would have sat inside Galaxy’s asset-management unit.