Galaxy Digital a U.S based crypto investment bank created by former hedge fund manager Michael Novogratz, has posted its quarterly results for Q1.
The results show a large unrealized loss, as the bears downturned the crypto market in the first three months of the year.
Galaxy Digital records large unrealized losses, still very optimistic
The financial report released by Galaxy Digital on Wednesday (its first ever), reveals that the company lost $13.5 million on digital asset trading and $85.5 million of unrealized losses on digital assets.
The company’s unrealized loss in digital assets is understandable given the poor run of the crypto market this year.
An unrealized loss is when an investment you are holding is in the red. Should you sell it, the unrealized loss would become a realized loss. If the value of the asset turns green while you hold, you would have unrealized gains or profits.
The investment firm also recorded a $1.1 million loss in paper investments and $22.9 million loss in its principal investing business.
As of March 31, Galaxy Digital had assets totaling $281.7 million of which $225.8 million were in form of digital assets and investments.
Novogratz remains confident about cryptocurrencies
The report released by the company only covers the results between January 1 and March 31, 2018. What the second quarter looked like for the New-York based company is yet to be reported.
Despite the relatively poor performance of the investment bank, its founder remains very confident in the company’s outlook:
“I AM VERY PROUD OF THE PROGRESS THAT WE HAVE MADE SINCE THE BEGINNING OF THE YEAR. WE HAVE ASSEMBLED A WORLD-CLASS TEAM WITH DEEP INSTITUTIONAL KNOWLEDGE AND EXPERTISE AND HAVE ALSO MADE SIGNIFICANT STRIDES IN SCALING OUR FOUR CORE BUSINESS LINES. I HAVE COMPLETE CONFIDENCE IN OUR TEAM’S ABILITY TO CONTINUE DRIVING GROWTH AND BELIEVE THE COMPANY IS STRATEGICALLY POSITIONED TO HELP FURTHER INSTITUTIONALIZE THE DIGITAL ASSETS AND BLOCKCHAIN TECHNOLOGY INDUSTRY.”
From his comments, it can be derived that Michael Novogratz is not at all perturbed by this loss. Novogratz still dreams of setting up a bank that will provide services in cryptocurrency and blockchain sectors.
The former Wall Street macro trader launched Galaxy Digital in November 2017. In the process, Novogratz invested $302 million of his own capital into the business (more than the $242 million contributed by all other investors combined.)
The report stating the Q1 result of the firm also confirmed plans to complete a merger with two Canadian companies:
- First Coin Capital Corp; and
- Bradmer Pharmaceuticals Inc.
The financial report is a requirement as Galaxy Digital undergoes a process of having its shares listed on a Canadian stock exchange.
With the mergers, the former Wall Street macro trader aims to build an:
“institutional-quality merchant banking business dedicated to cryptocurrencies and blockchain-based ventures that’s active in trading, principal investing, asset management and advisory work.”
Novogratz predicts the future of cryptocurrencies
Earlier this month, Novogratz predicted that mass adoption of crypto is “still five to six years away.”Novogratz said that one of the major obstacles preventing widespread adoption is the increasing “cost of technical talent”.
However, he recently remarked that institutional investors are beginning to see the potential in blockchain technology, which he says is seeing increasing adoption of cryptocurrencies.
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