Billionaire investor Mike Novogratz is starting a digital currency hedge fund, to be traded on the TSX Venture Exchange.In an announcement, Novogratz’s company, Galaxy Group Investments, stated their digital wing would merge with First Coin and Bradmer Pharmaceuticals, Inc. to form Galaxy Digital LP. They plan to raise $200 million in capital to start what some call the ‘Goldman Sachs of digital asset management’.The company will also include Novogratz’s own portfolio of digital assets, rumoured to be roughly $400 million USD (~$500 million CAD). His portfolio consists of digital currencies like Bitcoin and Ethereum, investments in ICOs, as well as stakes in start-ups like Ripple Labs.The company will oversee four main areas: trading, principal investing, asset management, and advisory work. The trading arm of the company will manage the company’s large portfolio and develop trading strategies and cross-exchange arbitrage. The principal investment arm of the company will be looking to invest capital raised form transactions on new ICOs and blockchain startups.Galaxy Digital will also handle asset management on behalf of limited partners and act in an advisory position to emerging blockchain and digital currency companies.
Novogratz was a partner at Goldman Sachs for ten years before leaving to start Fortress Investment Group LLC. His foresight and enthusiasm for digital currency is a major factor in the forming of Galaxy Digital LP.Novogratz famously coined the phrase “the herd is coming” in reference to the inevitable adoption of digital currency and blockchain technology on a global scale.
A champion of digital assets for many years, he uses his clout as a respected investor to bring a level of respectability to the field. Novogratz believes that blockchain technology will revolutionize the financial market in the same way that the internet revolutionized the communication industry.
This is not the first time we have heard of Novogratz’s plans for a digital currency hedge fund. Novogratz tweeted in December 2017 that he would be starting a digital currency hedge fund, but delayed due to market conditions. His announcement of the delay came following a sharp decline in the bullish price action of Bitcoin during the last few weeks of 2017.https://twitter.com/novogratz/status/944344137977008129This new announcement, though, is more official and includes the details of the mergers and acquisitions. The announcement also follows a stabilizing of the price of Bitcoin.Galaxy Digital is the largest venture so far in the world of digital currency. Moves like this are a sign that large investors are coming into the marketplace.A major barrier for some would-be digital currency investors has been the industry’s turbulent nature and learning curve. Institutions like Galaxy Digital should usher in a new wave of investments. Those who were initially skeptical are now investing, potentially paving the way for other hesitant investors to step forward.Image credit: TSX-V
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