Here Comes “The Goldman Of Crypto”: Novogratz Is Starting A Cryptocurrency Merchant Bank

Tuesday, January 9, 2018
By Paul Martin

by Tyler Durden
Tue, 01/09/2018

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.

In many ways, launching a merchant bank is far more notable than rolling out a mere hedge fund to daytrade the record crypto vol. As BBG observes:

A merchant bank is among the most ambitious concepts to emerge from the speculative frenzy that has characterized the cryptocurrency market. While Novogratz last year described the runup in bitcoin, ether, ripple and other so-called tokens as the “biggest bubble of our lifetimes,” he also has said he believes blockchain — the computer code that underpins all cryptocurrencies — will reshape finance just as the internet did communication.

The Rest…HERE

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