"Bitcoin Bull Is Not Over" - Novogratz Raises $250 Million For Crypto Merchant Bank

In late-December, former Fortress macro fund manager and crytpo-billionaire, Mike Novogratz shelved plans to launch his crypto-currency fund because he "didn't like market conditions," noting that Bitcoin may drop to $8,000 in the short-term... but adding that the bull market is not over.

"We didn’t like market conditions and we wanted to re-evaluate what we’re doing...I look pretty smart pressing the pause button right now."

image courtesy of CoinTelegraph

Novogratz was correct. Bitcoin tumbled since he spoke, dropping back below $8,000...

And now, as Bloomberg reports, Novogratz has opportunistically raised about $250 million for his cryptocurrency merchant bank during one of the biggest routs yet in Bitcoin, according to a person familiar with the deal.

Unlike in an IPO, Galaxy is raising money privately as part of a series of transactions that will allow it go public without disclosing financial statements.

The process also involves a reverse takeover of a Canadian shell company, Bradmer Pharmaceuticals Inc.

Terry Gou, the billionaire chief executive officer of China’s Foxconn, is among the investors in the private placement, said the person, who asked not to be identified because the transaction isn’t public.

Investors committed to buy shares of Novogratz’s firm, Galaxy Digital LP, through a holding company that eventually will trade on Toronto’s TSX Venture Exchange, according to the person.

Novogratz announced the private placement and listing plans in a statement last month.

As Novogratz detailed previously, Galaxy is building out a full fledged crypto merchant bank.

"I have over 30 percent of my net worth in crypto assets.  We have venture bets, ICOs, tokens, investments in funds, mining and advisory.  We also trade very actively.  We are making a large long term bet on crypto."

We wonder if the ramp off the sub-$6000 lows ahead of the regulatory hearings was the hand of Mike putting some of that newly found AUM to work?

Comments

Dutti NugginFuts Wed, 02/07/2018 - 22:42 Permalink

Mike Novogratz is a smart and courageous investor, having 30% of his assets in the crypto space. Would I have listened to him in December, I would have been a lot better off.

Unfortunately my average price is higher than the current price, but I had the opportunity to build a substantial position through this downturn.

However, anybody who does not yet have a position in Crypto has the opportunity and start now at current low levels.

The chances that prices in BTC and ETH will double from here is far greater than them going to near zero.

Scale down buying according to your comfort level would be appropriate if we would have another setback to new lows. Of course you have to have the mental and financial ability to hold on through downturns.

In reply to by NugginFuts

bombdog Dutti Thu, 02/08/2018 - 06:09 Permalink

I'm convinced Bitcoin will double from here, just because of so many guys like you with unshakable faith in coinz and absolutely no gameplan except to allocate 100% and then HODL. All coming out of the woodwork now since the big correction and asking all the salivating noobs to do exactly the same. So my simple bet is on a litecoin cfd just so I can get out of dodge. Let the games begin. And remember, whatever happens, a loss isn't a loss until you sell dude!

In reply to by Dutti

sessinpo NugginFuts Wed, 02/07/2018 - 23:59 Permalink

That may be what eventually it ended up as. Had to by BTC or ETH first though. And cashing out, at this time woukd also have to convert back to BTC or ETH first.

Things may change though. Bittrex is regaining conversion to fiat like Gemini and Coinbase has. But bittrex has a ton more alt coins. Will they be the first where you can trade fiat for tokens and other lesser known alts?

In reply to by NugginFuts

jcaz City_Of_Champyinz Wed, 02/07/2018 - 22:01 Permalink

LOL- a bank for crypto....

"Give all your crypto to me, I'll watch them for you and run them all thru my shop without interfering, I pinky-swear......"

Isn't the ENTIRE point of crypto to circumvent traditional banking pathways?  You guys keep winding up bringing crypto back to traditional money-  pointless.

If you don't see this guy for the opportunist that he is, you deserve to lose your money to him.

"Hi, I'm a banker and I'm here to help you!"

Classic.

In reply to by City_Of_Champyinz

Golden Phoenix jcaz Thu, 02/08/2018 - 05:00 Permalink

A merchant's bank. As in traditional banks keep pulling their support for crypto exchanges, coins offering Visa cards, etc. etc.. Mike starting a merchant bank and providing such services would offer the industry the support the industry it is going to replace keeps trying to deny it. 

In reply to by jcaz

Laowei Gweilo City_Of_Champyinz Wed, 02/07/2018 - 23:54 Permalink

it's pretty common because to IPO is the US the regulatory challenges would be incredibly onerous and inefficient. even in Canada.

it's why a lot of emerging sectors in general, whether cryptocurrency or cannabis, are flocking to the TSX.V and doing reverse mergers.

 

that said, I do agree with your sentiment... if you want do win over institutional investors, you'd be doing yourself a favour to just do traditional private placement with PE and then IPO it.

a few cryptos are doing this... there's 1 miner in Vancouver right now, they did a reverse merger, too. but the 2nd was is doing 2 rounds of PP and then IPOing.

and it's finding equity so far and the IPO I guess is on track so I'm not sure if Novo maybe underestimated the institutional demand.

that said, the aforementioned 1st miner has been crushed pretty bad recently (and never really got much of a 'December boom'  and no 'Long Island Blockchain/Kodak-esque boom' either so not sure how the 2nd one is doing the last couple weeks haha

In reply to by City_Of_Champyinz

skywalker22 manofthenorth Wed, 02/07/2018 - 22:15 Permalink

I feel for ya man. In a couple of years, your gonna regret being so closed minded. Gold has no intrinsic value. The value comes because people want it. The people want a decentralized, trustless, anti-fragile, censorship-resistant currency, so that is what they will get. The train is leaving the station, and I am sad for you that you won't be on it.

In reply to by manofthenorth

Panic Mode skywalker22 Thu, 02/08/2018 - 02:55 Permalink

I am not a gold bug but you are talking out of closed minded arse.

People want bitcoin because of getting rich quick (i.e. Greed) and it certainly helps the lucky fews. If people want it for the reasons you quoted, the price will be a steady rise, not a fucking yo-yo. Get real. You dumb wit. There are a lot of day traders for bitcoin.

 

In reply to by skywalker22

bilbert skywalker22 Thu, 02/08/2018 - 10:03 Permalink

"The people want a decentralized, trustless, anti-fragile, censorship-resistant currency, so that is what they will get. The train is leaving the station, and I am sad for you that you won't be on it."

Don't be sad, but you better count your blessings that crypto-currencies can't just be conjured up out of nothing, and there will never be any more crypto-currencies than BitCoin and Ethereum, 'cause it is so difficult, time-consuming and expensive to launch a new cryptocurrency.

Actually, I'm really, REALLY special in that I, personally, will soon be offering a THIRD cryptocurrency in the next week, which is called "Bob", strictly limited to the number of people on the planet named "Robert", and when that currency is fully subscribed, there will be a spork named "Tayesha" (fully gender and color-neutral, my crypto will be!), followed by "Muhammed", etc, and when surnames run out, there will be more sporks like "Garcia" and "Patel".

The reason MY crypto will be a MUCH better value than Bitcoin, is that it doesn't require the use of truly massive amounts of energy to create.  In fact, my crypto is completely Green, as it uses NO electricity at all to "mine", like Coal, Lead, or other resource-dependent Crypto's" 

Simply call or text me to purchase this hot NEW Crypto, NOW!!  Unlike Fiat currencies, of which Billions of dollars worth can be conjured up with just a computer keystroke, or the so-called "Precious Metals" which are widely known to be bountifully distributed across the Earth's crust, cryptocurrencies will never be in abundance due the high-cost and difficulty of producing them.     /s

 

In reply to by skywalker22

maxblockm manofthenorth Thu, 02/08/2018 - 15:03 Permalink

Store of value is your argument?

The ONLY people that have lost any value through Bitcoin were the ones that bought in December or January. ONLY those two months since 2009.

Any one else that stored value in BTC as opposed to AU...well, you should be able to look at the 20yr and see how that's worked out: https://www.bullionvault.com/gold-price-chart.do

Sure, gold has a longer history, but within it's own span of history, Bitcoin actually has been a better store of value than gold.

In reply to by manofthenorth

FakeNewsBandit Masher1 Thu, 02/08/2018 - 04:38 Permalink

It's a fucking image lol.. I love how goldbugs always get triggered by the image the media uses to portray bitcoin. Nobody is being tricked into thinking bitcoin is a solid coin like gold, its just a fucking representative image! Move on.. You fuckwits put so much time into hating Bitcoin, it's staggering.

Newsflash retards: Gold and Bitcoin are not mutually exclusive. Any chance of seeing something new in these comment threads and not the usual shittalk recycled time and time again

In reply to by Masher1

maxblockm Masher1 Thu, 02/08/2018 - 15:06 Permalink

Do you know the difference between gold and brass? The BRASS Casascius is the one you are thinking of:

https://www.google.com/search?q=brass+casascius&rlz=1C1CHBF_enUS776US77…

Actual 1 oz gold bitcoin (wallets) are extremely rare compared to the brass ones. When you search for 1 oz gold bitcoin the first search result that pops up is 1 oz silver bitcoin.

https://www.google.com/search?q=1+oz+gold+bitcoin&rlz=1C1CHBF_enUS776US…

 

 

In reply to by Masher1

Yen Cross Wed, 02/07/2018 - 21:54 Permalink

 It looks like the global currency cartel is going "apex predator" , on all the cryptos.

 Not unlike global "hot potato" with interest rates, and currency devaluation.

   The most dedicated, creative, driven, players will win. [It has nothing to do with money]

hedgeless_horseman iamrefreshed Wed, 02/07/2018 - 22:09 Permalink

 

Or, like me, you happen to have some commercial office leases that include electricity and HVAC.

But you're correct, it is especially nice to put a zero in the cost of electricity field of a crypto mining calculator.  The ROI on many GPU rigs drops to months instead of years.

A smart guy with some capital might take advantage of this sort of opportunity. 

In reply to by iamrefreshed

Yen Cross hedgeless_horseman Wed, 02/07/2018 - 22:20 Permalink

  Make no mistake H/H. I'm not disagreeing with you.

  That article you wrote several months ago regarding BTC profit taking, and disbursing those profits equally between BTC and Gold, were fantastic.

  I think that most all of those suggestions are applicable to almost any form of investing, and {risk exposure}.

  You obviously spent a significant amount of time working on that thesis, and I commend you. [I'm a better trader because of that sanguine advice]

 

 

In reply to by hedgeless_horseman

zibrus hedgeless_horseman Wed, 02/07/2018 - 22:25 Permalink

Good on you HH. I never had the capital to pull that off. =) Was a poor miner about 5 years ago and gave it up because the electrical costs were too high.

I broke even (back then) and still have the rigs and could turn them on, but my 1st gen ASICs are probably now even more out of date. Of course upward price movement and selling high has helped me more since then (and lost in boating and canoe accidents).

Mining protects the networks. Wouldn't mind running a full node just as a hobby sometime in the future.

In reply to by hedgeless_horseman

Son of Captain Nemo Wed, 02/07/2018 - 21:58 Permalink

Because when your mining server(s) are getting the boot from China, Russia and South Korea you might as well "loot" your own in North America if those are the only option(s) for a tanking $USD EVERYWHERE ELSE!...