Galaxy Digital Holdings LP, the crypto-investment bank founded by renowned investor Mike Novogratz, announced losses of $ 41 million in the third quarter, bringing its total deficit for 2018 to $ 136 million.
Bloomberg reports that the third quarter deficit consists of both realized and unrealized losses, all related to digital assets. They are mainly caused by the long positions of the company on Ether, XRP and Bitcoin, in what is until now a extremely difficult year for crypto-active.
An “existential threat”
Galaxy Digital logo A few days ago, Mr Novogratz told the Financial Times his frustration with the market situation:
“This year has been difficult. It’s hard to grow a business in a bear market […] The level of employee anxiety goes up when crypto-currencies fall. […] In more traditional companies, like Goldman Sachs, you do not worry that way. These societies do not suffer an existential threat.
After losing $ 134 million in the first quarter of 2018, the company returned to its colors in the second quarter, posting a net income of $ 35 million.
But the latest figures published are not likely to arouse the enthusiasm of its shareholders. Especially since the results of the fourth quarter could be even worse following the sharp fall in crypto-markets recorded over the past two weeks.
Low volumes and increased competition
To justify its poor results in the third quarter, the company notably mentioned the low trading volumes on crypto-markets, as well as increased competition in terms of arbitrage opportunities.
“As we continue to improve and strengthen our trading business, the lack of volume on the crypto-markets has represented a headwind.”
She also revealed that the value of her digital assets was $ 90.6 million – assets that would have cost her $ 172 million.
This Tuesday, the actions of Galaxy Digital have reached a historic low. Despite a rise recorded yesterday, they still show a depreciation of 47% over the last thirty days.
Nevertheless, Mike Novogratz continues to be bullish on cryptocurrencies, recently declaring that he expected to see in 2019 many institutional investors bet directly on digital assets.
At the beginning of November, the analyst predicted that Bitcoin could reach $ 9,000 by the end of the year, before reaching its historic level of $ 20,000 by 2019. He believes that the first cryptocurrency should soon benefit from the “FOMO” (the fear of getting through a juicy investment) institutional investors.