Mike Novogratz’s Cryptobank to Debut on Canada’s TSX Venture Exchange

News and Analysis

In a move that can be considered a major milestone for Bitcoin industry, billionaire Mike Novogratz’ crypto-focused merchant bank, Galaxy Digital LP, is set to begin trading on Toronto’s TSX Venture Exchange on August 1, reports Bloomberg.

Novogratz is a former Wall Street macro trader who made hundreds of millions of dollars buying and selling Bitcoin and Ether. He became one of crypto’s most prominent champions and decided in late 2017 to turn the business he’d started in his family office into a full-service merchant bank for the blockchain and crypto community. It would trade virtual currencies, invest in related companies, manage investment funds and advise clients on deals.

Galaxy sold shares at C$5 apiece in a private placement in January, weeks after Bitcoin peaked. The firm, which is based in New York, is finally set to start trading Aug. 1 on the TSX Venture Exchange through a separate vehicle, Galaxy Digital Holdings Ltd., under the GLXY ticker. Novogratz said eventually he intends to seek stock listings in Frankfurt, London and Hong Kong.

“We’re going to be a global company; we want to be globally traded,” he said.

In addition to building out his four businesses, Mike Novogratz plans for Galaxy include expanding in Asia and Europe and raising money for a fund based on the Bloomberg Galaxy Crypto Index. Novogratz said he hopes the firm will be cash-flow positive by year-end and predicted it will be profitable on a net-income basis by the second quarter of 2019.

The next few weeks may not be smooth sailing though. According to Novogratz, investors could have a tough time putting a value on Galaxy’s illiquid assets and it’s “unrealistic” to expect that the shares will trade at the January price now that Bitcoin has plunged about 40 percent since then and demand for crypto investments has softened.

Hive Blockchain Technologies Ltd. is a case in point. The Vancouver-based crypto miner has plunged 83 percent from its November peak, after it listed last year on the junior bourse via a reverse takeover.

“Unfortunately, the Canadian capital markets aren’t roaring anymore,” Novogratz said. “I have faith that they will come back.”

However, Mike Novogratz reflects on the “frustrating” demands of Canadian regulators that dragged out Galaxy’s listing for months and trapped his investors as Bitcoin collapsed and crypto fever cooled.

“If I knew what I know now, knew the crypto markets were going to swoon as much, and it was going to take so long, I might have stayed private for another year or so and then gone public,” Novogratz added. “But I don’t think it’s a mistake.”

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