{"id":23999,"date":"2018-01-09T17:24:57","date_gmt":"2018-01-10T01:24:57","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=23999"},"modified":"2026-10-17T20:17:36","modified_gmt":"2026-10-17T19:17:36","slug":"hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank\/","title":{"rendered":"Hedge Fund Billionaire Mike Novogratz to Launch Crypto Merchant Bank"},"content":{"rendered":"<p>The crypto-space is full of evangelists.<\/p>\n<p>Those who are enthusiastic about cryptocurrencies tend to be <em>really <\/em>enthusiastic. None more so than <a href=\"https:\/\/cryptoslate.com\/mike-novogratz-500-million-crypto-hedge-fund\/\">Mike Novogratz<\/a>. In the past year, Novogratz made frequent appearances on network TV to boast about the potential for cryptocurrencies to be the leading source of financial innovation in the world.<\/p>\n<p>He is known for his outlandish predictions that, when they turned out to be right, accredited him with a type of guru status that heightened his respectability. For example, <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-11-21\/mike-novogratz-says-bitcoin-will-end-the-year-at-10-000\">Novogratz was an early<\/a> predictor of Bitcoin\u2019s price surge, publicly declaring that it would end 2017 at $10,000.<\/p>\n<p>Of course, Bitcoin even outperformed his, at the time, ambitious prediction. He\u2019s since speculated that <a href=\"https:\/\/cryptoslate.com\/bitcoin-hit-40000-end-2018\/\">Bitcoin could hit $40,000<\/a> by the end of 2018.<\/p>\n<h2>Shelving the Crypto Hedge Fund<\/h2>\n<p>That\u2019s why it was so surprising that Novogratz so quickly abandoned his much-hyped crypto hedge fund after cryptocurrencies crashed in mid-December.<\/p>\n<figure id=\"attachment_17547\" aria-describedby=\"caption-attachment-17547\" style=\"width: 320px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-17547\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/11\/mike-novogratz-bitcoin-10000.jpg\" alt=\"\" width=\"320\" height=\"180\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/11\/mike-novogratz-bitcoin-10000.jpg 640w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/11\/mike-novogratz-bitcoin-10000-300x169.jpg 300w\" sizes=\"(max-width: 320px) 100vw, 320px\" \/><figcaption id=\"caption-attachment-17547\" class=\"wp-caption-text\">In the fall of 2017, Novogratz prediction that Bitcoin would hit $10,000 before the end of the year.<\/figcaption><\/figure>\n<p>Just before the holiday weekend, cryptocurrencies endured an unexpected and <a href=\"https:\/\/cryptoslate.com\/cryptocurrency-markets-drop-fear-south-korean-regulation\/\">unexplained flash crash<\/a>. Within a matter of hours, cryptocurrencies saw significant selloffs and prices plummeted. <a href=\"https:\/\/cryptoslate.com\/coins\/bitcoin\/\">Bitcoin<\/a> was particularly hard hit.<\/p>\n<p>The digital currency fell from almost $19,000 to less than $14,000, a near 25% drop in just a matter of hours. By the end of the day, most cryptocurrencies fully recovered, but the shock was a bitter reminder that, in a year of unprecedented growth, cryptocurrencies can still be unreliable.<\/p>\n<p>In the wake of the crypto-crash, Novogratz announced that he was relinquishing plans to launch his crypto hedge fund, saying that \u201cEmotionally it didn\u2019t feel right.\u201d<\/p>\n<p>\u201cI feel good about the decision,\u201d <a href=\"https:\/\/www.wsj.com\/articles\/why-michael-novogratz-halted-his-bitcoin-hedge-fund-1513982909\">The Wall Street Journal<\/a> reported Novogratz saying, \u201cWe\u2019ll readdress it in the new year.\u201d<\/p>\n<p>He certainly has readdressed it.<\/p>\n<p>On Tuesday, Novogratz announced that he\u2019s launching a merchant bank focused on cryptocurrencies and blockchain initiatives.<\/p>\n<p>The bank is called Galaxy Digital LP, and it appears to be the new iteration of his idea for a crypto hedge fund.<\/p>\n<p>According to a <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-01-09\/novogratz-starts-merchant-bank-envisioning-goldman-of-crypto\">Bloomberg<\/a> report, Novogratz is taking all of his crypto assets, believed to be as much as $400 million worth of cryptocurrency, to his new project. In other words, he\u2019s all in.<\/p>\n<p>A merchant bank is similar to an investment bank in that it provides access to investment markets without the features of standard banking. They are not available to the general public.<\/p>\n<h2>Going Institutional<\/h2>\n<p>Bloomberg reporter Erick Schatzer identified that the bank will focus its attention on four distinct categories related to cryptocurrency and blockchain technology.<\/p>\n<ol>\n<li><strong>Crypto trading<\/strong> \u2013 the bank will invest in Bitcoin and other digital currencies through cryptocurrency exchanges.<\/li>\n<li><strong>Principle investing<\/strong> \u2013 the bank will invest in blockchain startups and ICOS.<\/li>\n<li><strong>Advisory business<\/strong> \u2013 the bank will conduct market research and advise new investors looking to get involved in cryptocurrencies.<\/li>\n<li><strong>Asset management<\/strong> \u2013 the bank will provide asset management services to its clients.<\/li>\n<\/ol>\n<figure id=\"attachment_5941\" aria-describedby=\"caption-attachment-5941\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5941\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal.jpg\" alt=\"\" width=\"300\" height=\"137\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal.jpg 600w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/10\/mike-novogratz-ethereal-300x137.jpg 300w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-5941\" class=\"wp-caption-text\">At the a conference in New York in June 2017, Novogratz says that cryptocurrencies could become a $5 trillion industry, but they need to develop sound business principles to satisfy regulators and lend legitimacy.<\/figcaption><\/figure>\n<p>The launch involves a complicated process, first reported by Bloomberg, that requires Galaxy to purchase First Coin Capital Corp, a crypto startup based in Canada. This entity will then merge with Bradmer Pharmaceuticals Inc., a shell company that will employ a reverse takeover to raise money for a private stock placement. Galaxy Digital Holdings will be listed on the Canadian venture exchange, TSX.<\/p>\n<p>Although a plethora of crypto hedge funds launched in 2017, a merchant bank is a new and far more ambitious idea.<\/p>\n<p>If successful, Novogratz\u2019s project would be one of the most banking expressions to hit the crypto markets. Increasingly, cryptocurrency values and financial models are being integrated with mainstream financial institutions and practices. For Novogratz, he wants to develop Global Digital LP into the Goldman Sachs of the crypto world.<\/p>\n<p>He may have balked when crypto markets crashed in December, but he\u2019s back in earnest. He's planning to put his money where his mouth is, and now we get to see a first of its kind project in the crypto world.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The crypto-space is full of evangelists. Those who are enthusiastic about cryptocurrencies tend to be really enthusiastic. None more so than Mike Novogratz. In the past year, Novogratz made frequent appearances on network TV to boast about the potential for cryptocurrencies to be the leading source of financial innovation in the world. He is known [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":24053,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,29],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hedge Fund Billionaire Mike Novogratz to Launch Crypto Merchant Bank<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hedge Fund Billionaire Mike Novogratz to Launch Crypto Merchant Bank\" \/>\n<meta property=\"og:description\" content=\"The crypto-space is full of evangelists. Those who are enthusiastic about cryptocurrencies tend to be really enthusiastic. None more so than Mike Novogratz. In the past year, Novogratz made frequent appearances on network TV to boast about the potential for cryptocurrencies to be the leading source of financial innovation in the world. He is known [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2018-01-10T01:24:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-10-17T19:17:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/01\/mike-novogratz-crypto-bank-facebook.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bill DeLisle\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Hedge Fund Billionaire Mike Novogratz to Launch Crypto Merchant Bank\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/01\/mike-novogratz-crypto-bank-twitter.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bill DeLisle\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/hedge-fund-billionaire-mike-novogratz-launch-crypto-merchant-bank\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/#person\",\"name\":\"Bill DeLisle\",\"url\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/bill-delisle\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/09\/cs-bill-d.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2017\/09\/cs-bill-d.jpg\",\"caption\":\"Bill DeLisle\"},\"description\":\"Bill is a writer who frequently covers cryptocurrency and the fintech movement. 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