Tag: Galaxy Digital

Bitcoin NFTs to Hit $4.5B Market Cap

by Blockchain News

 Galaxy Digital’s research unit has predicted that the Bitcoin nonfungible token (NFT) market could reach a $4.5 billion market cap by March 2025 based on the current growth rate and infrastructure of Ethereum’s NFT market. This is due to the emergence of a native on-chain ecosystem for NFTs on Bitcoin, which was not possible before the launch of the Ordinals protocol in late January.

Bitcoin NFTs, also known as Ordinals, allow users to inscribe data such as images, PDFs, video, and audio onto individual satoshis, each representing 0.00000001 Bitcoin (BTC). The market for Bitcoin NFTs has attracted significant attention since the launch of the Ordinals protocol, with NFT giants such as Yuga Labs jumping in on the hype. On February 28, the $4 billion firm behind the Bored Ape Yacht Club announced a Bitcoin-based NFT project dubbed “TwelveFold” in recognition of the Ordinals movement.

Galaxy researchers analyzed the potential growth of Bitcoin NFTs in a new report published on March 3. The report provided three market cap predictions based on the firm’s analysis, covering bear, base, and bull case scenarios. The baseline analysis predicted that if Bitcoin NFTs can expand to mainstream NFT culture like profile pictures, memes, and utility projects, the market capitalization should increase to $4.5 billion.

The researchers also noted that the projection of $4.5 billion is based on the rapid development in inscription awareness coupled with the marketplace/wallet infrastructure already out today. In a bear case scenario, Galaxy estimated that Bitcoin NFTs can still reach a market cap of $1.5 billion based on the current level of interest and supporting infrastructure. On the bullish side of things, Galaxy researchers estimate that the Bitcoin NFT market could reach around $10 billion if it provides strong competition to Ethereum NFTs while providing unique use cases.

The report highlighted the significance and utility of Bitcoin NFTs, noting that the addition of sizable data storage with strong availability assurances opens up a variety of use cases, including new types of decentralized software or Bitcoin scaling techniques. Even the NFT use case alone has the potential to dramatically widen the scope of Bitcoin’s cultural impact.

As of the report’s publication, more than 250,000 Ordinals have hit the market, indicating the growing interest and adoption of Bitcoin NFTs. With the emergence of a native on-chain ecosystem for NFTs on Bitcoin, it will be interesting to see how the market evolves and whether it can compete with Ethereum’s NFT market.

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ACA Group Has Decided to Abandon its Acquisition of BitFlyer Holdings

by Blockchain News

ACA Group, a leading financial advisor for institutions across the world has officially announced to the public that it is no longer interested in purchasing holdings of a Japanese-based cryptocurrency exchange, BitFlyer.

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The ACA Group which is based in both Singapore and Japan announced the news on Saturday through Nikkei.com. 

ACA Group had earlier in  April agreed to purchase majority stake holdings of BitFlyer valued at up to $370 million (45 billion Yen). 

The intention of ACA Group was to sell off the BitFlyer holdings after it has increased in corporate value. A coalition of shareholders independently negotiated the ACA agreement with the support of Minefumi Komiyama, the founder of bitFlyer, who owns about 13% of the company.

Not much information was given by ACA Group on their decision to back out from their initial agreement but the decision comes after a number of proposed collaboration has come to halt recently including Galaxy Digital, which terminated its planned acquisition of crypto manager BitGo in August.

All About BitFlyer

BitFlyer is a private company in Tokyo, Japan. The company is involved in buying, selling, and trading bitcoin and other cryptocurrencies with more than 2.5 million users across its platform. BitFlyer was launched against the backdrop of Bitcoin’s permanent market cap of $14,000.

The Tokyo-based crypto exchange BitFlyer recorded a loss of about $6.9 million in profit for the company’s financial year ending in 2019. The loss in profit was a result of a drop in the value of Bitcoin (BTC) in the second half of 2019. 

The Financial Service Agency also discovered a security mishap in BitFlyer’s business processes which eventually expose its customers’ investments to cyber theft in 2018. 

BitFlyer responded to the issue by promising to stop receiving new businesses after regulators said they were not putting the needed efforts and structures to curb money laundering and the finance of terrorism.

The future is still bright for BitFlyer as it has continually shown resilience in the face of adversity over the years. The firm hopes that investors use their previous success to judge them while considering future investments with them.

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Crypto Firm BitGo Files $100m Lawsuit against Galaxy Digital for Breaching Acquisition Deal

by Blockchain News

BitGo has filed a lawsuit against crypto financial services firm Galaxy Digital.

The California-based institutional digital asset financial services company is seeking more than $100 million in damages as it claims that Galaxy Digital intentionally breached the companies’ proposed $1.2 billion merger agreement announced in May last year.

On May 5 2021, Galaxy announced plans to acquire custodian provider BitGo for $1.2 billion in cash and stock.

However, last month on August 15, Galaxy terminated its deal to acquire BitGo, something that did not go with the other party. BitGo immediately responded, saying it would seek $100 million in damages following the termination of its merger with Galaxy Digital.

In a tweet yesterday, BitGo announced: “Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo.”

The crypto custody firm further said that the complaint was filed in Delaware Chancery Court and will be made available to the public on Thursday, September 15.

In a statement, BitGo disclosed its intention to sue Galaxy, describing the termination of the deal as “absurd.”

What Caused the Failed Merger Deal?

On August 15, Galaxy Digital announced that the firm terminated a proposed $1.2 billion stock and cash deal that would allow the crypto company to acquire the digital asset custody business and financial services provider BitGo. Galaxy detailed that the abandoned deal was due to BitGo’s “failure to deliver” specific financial documents.

Galaxy said it exercised its right to terminate its previously announced acquisition deal with BitGo, following BitGo’s failure to deliver by July 31 audited financial statements for 2021 that comply with the requirements of the proposed agreement. Galaxy further stated: “No termination fee is payable in connection with the termination.”

The news of the failed merger came only a week after Galaxy reported a second-quarter net loss of $554.7 million following a plunge in the value of cryptocurrencies.

The financial losses followed Galaxy’s exposure to the collapse of TerraUSD algorithmic stablecoin in mid-May.

The collapse of the Terra blockchain ecosystem hit confidence in cryptocurrencies. Several crypto lending firms such as Celsius Networks, Voyager Digital, Vauld, Zipmex, Babel Finance, among others, were forced to stop customer withdrawals, and many became bankrupt.

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Galaxy Digital Terminates BitGo Acquisition, But Still Eyes Listing on Nasdaq

by Blockchain News

Galaxy Digital, one of the leading crypto financial services providers, has announced its plans to terminate the proposed acquisition of crypto infrastructure service provider, BitGo. 

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The deal is billed to be completed in the first quarter of this year, as reported earlier by Blockchain.News, but Galaxy Digital said it had to terminate the acquisition as BitGo did not fulfil some of the terms of the acquisition.

According to Galaxy Digital, BitGo has refused to deliver its audited financial statements for 2021 that comply with the requirements of our agreement. Per the announcement, this financial statement was due by the end of July this year. The company said would be no termination fee associated with the broken partnership and acquisition.

“Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions,” said Mike Novogratz, CEO and Founder of Galaxy.

While it revealed the deal’s termination, Galaxy Digital said it still plans to go public in the United States and eventually trade on the Nasdaq Global Select Market. The proposed listing was pushed to this year. Despite the onslaught in the digital currency ecosystem, the firm said the loss is now dependent on the completion of the SEC’s review and subject to stock exchange approval of such listing.

BitGo came off as a very well coveted startup for prominent players in the digital currency ecosystem at a time. Prior to the time when Galaxy Digital submitted its bid for the company, there were reports that Paypal also had its eye on the firm, as it was making its way into the digital currency ecosystem with new product suites back in 2020.

 

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Galaxy Digital’s Q2 Net Loss Tripled To $554.7 Million Amid Market Turmoil

by Blockchain News

Galaxy Digital Holdings Ltd, major US-based financial services and investment management firm that provides institutions and clients with a full suite of digital assets and financial solutions, on Monday announced its second-quarter earnings report that showed that the company has more than tripled the amount of the net loss it witnessed in the same period last year.

The digital asset manager said the expanded loss during the period was triggered by the current market downturn as well as investments in its trading business, which collectively drove unrealized losses higher during the period.

Galaxy stated that its net loss stood at $554.7 million in the second quarter, compared to a loss of $182.9 million during the same period last year.

The company said that its cash at hand stood at $1 billion while its net digital asset positions stood at $474.3 million in the second quarter.

On Dec. 31, 2021, Galaxy Digital said it had $811.1 million in cash and $1.21 billion in net digital asset positions.

The firm said its preliminary assets under management were almost $1.7 billion at the end of the second quarter, compared with $1.6 billion a year ago. However, assets under management declined 40% from the first quarter.

Galaxy mentioned that its mining business made a revenue worth $10.9 million in the second quarter, and its comprehensive net income tripled from a year ago.

The company said investments it made in its trading business stood at $753.9 million at the end of June, a decrease of about 25% from March 31, majorly due to the decline in the valuations of certain investments.

The Crypto Market Plunge as Hard Lesson for Asset Managers

The crypto market experienced a full meltdown in May and June, losing $1 trillion in value within a few weeks.

The sudden and rapid collapse of popular cryptocurrencies and crypto-related firms (such as Three Arrows Capital, and Celsius Networks, among others) revealed the unstable nature of the crypto industry.

Among companies that experienced massive losses worth millions of dollars were Galaxy digital, Coinbase, and others.

This year, Coinbase has seen its stock price plunge 81% and has recently announced plans to cut 1,100 employees as it grappled with a slowdown in trading that has compelled it to abandon its growth plans. In the first quarter, Coinbase reported a loss of $430 million.

Most crypto asset managers are now struggling because fewer users on the platforms are making transactions.

Early this year, prices of bitcoin, Ethereum and other major coins began dropping as soaring inflation tightened its grip on the U.S. economy.

But all is not lost for crypto asset managers as more bounces are expected in the market. Despite recent struggles, these firms will make it through the ongoing crypto market clampdown and eventually thrive. That is because these firms have learned how to survive such downturns.

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Galaxy Digital Loses $111.7m in Q1 as Crypto Markets Plunge

by Blockchain News

A diversified financial services firm dedicated to the digital asset, Galaxy Digital (GLXY), announced its financial results for the first quarter ended March, with a significant financial loss.

The company recorded a net loss of $111.7 million due to unrealised losses in digital assets and investments in its trading and investing businesses.

In the same period, in 2021, it generated a profit of $858.2 million.

Last week, the Federal Reserve raised interest rates by 50 basis points, the largest rate increase in 20 years. There has been a sell-off panic in both the cryptocurrency and stock markets.

But CEO Michael Novogratz said during Galaxy’s earnings call on Monday that he wasn’t nervous or panicked, noting that cryptocurrencies are now serving as a tech game savings driver.

The company currently manages about $2.7 billion in assets, down 5 % from the previous quarter, according to financial data.

In May, the company announced its $1.2 billion acquisition of BitGo, which will help transform such exchanges.

BitGo, an independently regulated digital asset custodian, will provide Galaxy with a critical piece of infrastructure, making it a one-stop crypto-shop for institutional investors. BitGo will provide a cross-selling opportunity for Galaxy, which has a combined customer base of 700 institutions.

A few days ago, Galaxy Digital also partnered with CI Global Asset Management (“CI GAM”), a major Canadian asset management firm, to launch ETFs focused on blockchain technology and Metaverse.

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Goldman Sachs Trades First Over-the-Counter Crypto Transaction with Galaxy Digital

by Blockchain News

Goldman Sachs Group Inc, a major US multinational investment bank headquartered in New York City, has further expanded its digital-asset offerings to Wall Street investors.

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The investment bank announced Monday that it has traded the first non-deliverable Bitcoin option, a derivative tied to Bitcoin’s price that pays out in cash.

The transaction was facilitated by Galaxy Digital Holdings Ltd., a crypto financial-services company led by former Goldman partner Michael Novogratz. The move marked Goldman’s push further into the nascent market for derivatives tied to digital assets.

The product launch is important as crypto holders such as hedge funds, and Bitcoin miners are looking for derivative exposure to Bitcoin, either to make bets on the cryptocurrency’s price without directly owning it or to hedge existing exposure to it. They use options to hedge risks or boost yields, and over-the-counter transactions are normally larger trades negotiated privately.

In a statement, Damien Vanderwilt, the co-president and head of global markets at Galaxy, talked about the development and said: “This marks the first OTC crypto transaction by a major bank in the U.S. as Goldman Sachs continues expanding its cryptocurrency offerings, demonstrating the continued maturation and adoption of digital assets by banking institutions. The move is set to open the door for other banks considering OTC as a conduit for trading digital assets.”

Max Minton, Goldman’s Asia Pacific head of digital assets, also commented about the announcement and stated: “This is an important development in our digital assets capabilities and for the broader evolution of the asset class.”

Enabling Customer’s Access to Digital Assets Markets

Early this month, Goldman Sachs Group Inc started exploring offering over-the-counter bilateral crypto options, which signalled to expand its participation in helping firms trade digital-currency derivatives.

Following a growing demand from institutional clients, Goldman reopened its crypto trading desk in March last year after a three-year break. As a result, Goldman tapped Galaxy Digital as its liquidity provider or a market maker for block trades on CME Group. Goldman opened up trading of non-deliverable forwards, a derivative tied to Bitcoin’s price that settles in cash. It also provides exchange-listed options and futures trading in Bitcoin and Ether.

The major investment bank has seen demand for derivative-type hedging, and the development of an options market is set to be the next big thing.

The market for these options is still in its infancy and has been dominated by crypto-native companies like Galaxy Digital Holdings Ltd, Genesis Global Trading Inc., and GSR.

Through Galaxy Digital, Goldman now provides liquidity and takes risk on behalf of clients to facilitate larger crypto derivatives trades.

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Goldman Sachs Offers Customers Access ETH Fund via Galaxy Digital

by Blockchain News

Multinational investment bank Goldman Sachs today announced its partnership with Galaxy Digital, the crypto merchant bank founded by Mike Novogratz, to once more enable its customers to get greater access to the crypto business.

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According to a new Securities and Exchange Commission filing, New York City headquartered Goldman Sachs has been giving its customers exposure to ETH through Galaxy Digital’s Ethereum Fund.

Customers of Goldman Sachs who intend to invest in Ethereum (ETH) on the spot, can now get access through Galaxy’s ETH Fund.

As per the filing dated March 8, Goldman was named as a receiver of fees for introducing customers to the fund.

While the actual amount bought by Goldman clients is unknown, the filing shows the minimum investment per investor is $250,000. The report further indicates that the Galaxy’s ETH Fund has made sales of slightly more than $50.5 million since its beginning.

Goldman Sachs is now recommending Galaxy Digital’s ETH Fund as a potential investment product that clients should go for.

Expanding Access of Crypto Product to Clients

This is not the first time Goldman Sachs and Galaxy Digital have collaborated. Goldman has been ramping up its cryptocurrency work in recent months. In June last year, the investment bank started trading Bitcoin futures with Galaxy Digital to help clients as hedge funds deal in publicly traded futures tied to Bitcoin. The trades represented the first time that Goldman used a digital assets firm as a counterparty.

In May, Goldman created a cryptocurrency trading desk to make markets in digital currencies such as Bitcoin. The move marked its major step in digital assets investing.

Goldman assigned Galaxy to serve as its liquidity provider to help it equip its clients with best-execution pricing and secure access to the assets they want to trade.

Goldman has been leaning on Galaxy for access to the crypto world because the highly regulated banking industry can’t handle Bitcoin directly. Goldman found Galaxy as a partner with a wide range of liquidity venues and differentiated derivatives capabilities spanning the crypto ecosystem.

In July, Goldman filed an application with the US Securities and Exchange Commission (SEC) to offer an exchange-traded fund (ETF) focused on securities of cryptocurrency-related companies.

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Galaxy Digital CEO Mike Novogratz Says Bitcoin Has Hit The Bottom

by NEWSBTC

Bitcoin has been on a downward streak since the last quarter of 2021, and this has spilled into the new year. As January goes into full bloom, it has come with discouraging movements for investors as over $500 billion has been wiped off the market. This has sent bitcoin’s price down to the dreaded $40,000 price range.

One question that remains in the mind of investors is, has the market seen the bitcoin bottom? Billionaire Mike Novogratz attempts to answer this as he puts forwards his thoughts on the issue and predicts the bitcoin bottom.

Related Reading | TA: Bitcoin Key Indicators Suggest A Strengthening Case For More Downsides

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Bitcoin Should Bottom Out Between $38,000 to $40,000

Galaxy Digital CEO Mike Novogratz has always been an active voice in the crypto space and has at various times given his thoughts on the market. This time around, Novogratz sat down with CNBC’s Squawk Box, where he predicted where the bottom of the current bitcoin downtrend will be.

The billionaire CEO placed the floor of the current downtrend at $38,000 which he does not see bitcoin going under. Currently, bitcoin’s lowest during the dips have been $40,680, from which the digital asset has since recovered. But if Novogratz’s predictions are anything to go by, then the market may see another dip before there is a full-blown recovery trend.

Bitcoin price chart from TradingView.com

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BTC price tumbles down to $41,475 | Source: BTCUSD on TradingView.com

The CEO gives his reason for this bottom as institutional investors taking advantage of the low prices to get into the digital asset. I” know big institutions who are going through their process to put positions on. They’re going to see those as attractive levels to buy,”  Novogratz said.

“On the charts, $38,000, $40,000 feels like where we should bottom,” he added.

Inflation Will Drive Growth

Continuing on, Novogratz shares more regarding his stance on this predicted bitcoin bottom. One of those has been inflation.

Those who have been following the markets know that rising inflation rates have led to increasing concerns among investors who have begun to look for alternatives to gold to serve as an inflation hedge. Bitcoin has naturally become the option for these investors.

The Fed believes that inflation rates will begin to come down, but the CEO explained that if this does not go as planned, then “all bets are off.”

Related Reading | Melania Trump Congratulates Bitcoin On 13th Anniversary Of Bitcoin Genesis Block

Digital Galaxy, on which Novogratz heads as CEO, has made a name for itself in the space as being a big bitcoin proponent. The company currently holds over 12,000 bitcoins, making it one of the companies with the largest bitcoin holdings in the world.

Mike Novogratz himself also has a personal stake in cryptocurrencies, revealing that he holds about 85% of his net worth in cryptocurrencies, which at the time translated to up to $4.8 billion held by the billionaire in crypto.

Featured image from Stock Hax, chart from TradingView.com

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Galaxy Digital CEO Explains Why Ethereum Is Outperforming Bitcoin

by NEWSBTC

Bitcoin’s utility as an inflation hedge has been a big push for the adoption of the cryptocurrency by investors. Ethereum on the other hand is fast-rising to become the preferred crypto for hedging against inflation for investors. The digital asset’s performance over the past couple of years has proven that it is a strong contender for bitcoin given the year-over-year returns recorded.

Only five years old, Ethereum has grown to become one of the largest assets in the world. It was recently named as the 15th largest asset in the globe, ahead of all of the big banks. Further adoption of Ethereum going forward is inevitable and Galaxy Digital CEO Mike Novogratz has commented on why Ethereum continues to outperform pioneer cryptocurrency Bitcoin.

Related Reading | Goldman Sachs CEO Sidesteps Bitcoin Inquiries, Says Blockchain Is More Important

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Ethereum Is A Technology Play

Novogratz attributed the growth of Ethereum to the technology which is an attractive point for investors. Ethereum has proven to be one of the cryptocurrencies with the most use cases, especially with the advent of the decentralized finance (DeFi) space. Sitting down with CNBC for an interview on Wednesday, the CEO pointed out that Ethereum’s offering is larger than an inflation play.

In contrast to this, bitcoin’s biggest offering still hinges on its being an inflation bet. The digital asset which has a supply cap of 21 million coins has always attracted investors due to its deflationary nature. However, Novogratz pointed out that bitcoin starts to lose its appeal when it is being pitted against a devalued currency like the dollar.

Related Reading | Why Closing Out The Year Below $50,000 Could Be Bad For Bitcoin

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Ethereum combats the problem of being just an inflation bet by providing innovative tech in the blockchain industry. “People see Ethereum as a technology bet,” Novogratz noted.

Since investors are betting on the tech rather than its use as an inflation hedge, it serves a better long-term purpose compared to bitcoin. This has helped it steal market share from the top cryptocurrency and continues to do so.

Technology Trumps Inflation

An increasingly pressing issue for investors has been the rate at which the Fed has been pumping money into the economy. Experts have called for a stop to the incessant money printing, which is driving inflation rates through the roof but the pleas and warnings have fallen on deaf ears. So, investors have had to turn to crypto investments that have proven themselves to properly hedge inflation, such as bitcoin.

Ethereum price chart from TradingView.com

ETH getting ready to test $4,000 | Source: ETHUSD on TradingView.com

Bitcoin bull and crypto supporter Mike Novogratz sees all of the money printing working out in the favor of cryptocurrencies in what he calls a “monster fourth quarter”. He however did not limit this expected bull market to crypto alone. Novogratz also expects to see the stock market continue its rally.

Featured image from FT.com, chart from TradingView.com

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Bitcoin (BTC) $ 27,455.36 0.51%
Ethereum (ETH) $ 1,644.94 1.25%
Litecoin (LTC) $ 64.34 2.80%
Bitcoin Cash (BCH) $ 228.91 8.06%