Novogratz Company Galaxy Digital Makes $ 141 Million Loss Within q1-q3 2018
Not only investors but also crypto companies are suffering from the bear market that has been taking place since the beginning of the year. As it became known, Galaxy Digital Holdings LP, the cryptocurrency trading bank founded by well-known crypto-investor Mike Novogratz, has so far incurred losses of $136 million this year, of which $41 million was generated in the third quarter of 2018 alone.
Novogratz, a former partner, and renowned hedge fund manager at Goldman Sachs, jumped on the crypto train as cryptocurrency prices rose in recent years. His company is required to produce detailed financial statements, showing a rare glimpse into the effects of low and falling prices that persist throughout the year.
As Bloomberg reports, the losses were mainly caused by the loss of positions in Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). It is remarkable that the considerable losses of the last few weeks (Q4) have not yet been factored in and probably mean much greater losses. Interestingly, the realized losses in the third quarter of 2018 were, interestingly, mainly from ether sales, in contrast to the relatively low losses from BTC and XRP positions. Interestingly, in response to the hype surrounding Ethereum Classic, the company also held a small position in ETC, which even managed to earn $1.9 million on the Ethereum alternative.
Galaxy Digital attributed its poor trading performance in the third quarter to low market trading volumes and increased competition for arbitrage opportunities.
While we continue to improve and strengthen our trading business, the absence of a general trading volume in cryptocurrencies was a headwind,
said a company representative. He said also that the market value of the assets, minus the short positions, was $90.6 million at the end of September and that the assets cost $172.7 million.
Just recently, Mike Novogratz told the Financial Times that his company is struggling in 2018:
2017 was just fun, it was almost stupid. But this year was a challenge. It’s a shitty thing to build a company in a bear market. In most traditional shops, such as Goldman Sachs, do not worry. There is no existential threat to these companies out there.
Author: Marko Vidrih
Image via galaxydigital.com