In order to access its exclusive asset storage and management capabilities, Galaxy Digital has put $44 million into an institutional bitcoin custody platform.
The purchase of GK8, a company that has created its own patent bitcoin custody system with the intention of providing safe asset management for institutional customers, has been successfully completed by the cryptocurrency investment business owned by Mike Novogratz.
The firm specializes in the provision of cold vault technology, which enables transactions to be carried out despite the absence of a connection to the internet. It has the potential to automate transactions thanks to its in-house multi-party computation (MPC) vault, and the service also gives access to decentralized finance (DeFi) networks, tokenization, and NFT trading.
According to a statement released by Novogratz, one of the primary motivations for the purchase was the rising demand for custody services among investors. The cold storage solutions and wallet technologies developed by GK8 will be integrated into GalaxyOne, the premier brokerage platform that will soon be released by Galaxy Digital.
As a result of the business transaction, Galaxy will expand its operations to include a location in Tel Aviv, where they will bring on approximately 40 staff formerly employed by GK8. Lior Lamesh and Shahar Shamai, co-founders of GK8, will continue in their roles as leaders of Galaxy’s custodial technologies offering after the company was acquired.
At the time of its introduction, GalaxyOne is expected to provide institutional-grade consumers with access to a comprehensive variety of bitcoin financial services. Trading, lending, derivatives, cross-portfolio margining, and custodial offers are all going to be a part of this. All of these are going to be handled by GK8.
In December 2022, Galaxy announced the purchase of Argo Blockchain’s primary mining operation for the price of $65 million. This move was Galaxy’s way of doubling down on its investments in the cryptocurrency mining business. In order to avoid going bankrupt during a challenging year for the mining industry, the mining company was forced to sell up its Helios mining plant.
The exodus of forced selling made cryptocurrencies partly resilient in the last month, according to Galaxy Digital Holdings founder Mike Novogratz.
Speaking at a conference in Singapore, Novogratz pointed out:
“We’re in this weird equilibrium where there are a few buyers, there are a few sellers, and there’s not that energy in the market like you’re seeing in the equity market or the bond market where you have to sell, right?”
Significant leverage has engulfed the crypto market, triggering a bearish run.
Nevertheless, Novogratz acknowledged that cryptocurrencies would take off again once the Federal Reserve (Fed) eased the aggressive monetary tightening, but this would not happen in a sustainable way until Web3 projects experienced mass adoption.
He added:
“Many crypto hedge funds won’t survive 2022’s rout in virtual coins. The implosion of Do Kwon’s Terraform Labs project was ‘heartbreaking’ and a lesson for the crypto industry.”
South Korean authorities have asked Interpol to issue a red notice for his arrest after Kwon denied being in hiding from law enforcement.
The crash of TerraUSD (UST) and Luna, which triggered the loss of $60 million of investor funds following the bearish outlook in the market, has made cryptocurrency platforms witness the least amount of engagement in two years based on the departure of weak hands. Market insight provider Santiment explained:
“If it feels like there are less people commenting and showing interest in crypto these days, your intuition is correct. Commentary hasn’t been this scarce since the end of 2020. Twitter has especially taken a hard fall in the past month.”
Meanwhile, Santiment acknowledged that profit-taking tendencies surfaced after Bitcoin closed the $20,000 mark and said:
“Many traders were apparently awaiting the $20k threshold to begin selling their bags. As Bitcoin crossed back above this psychological level, mass profit taking ensued.”
Therefore, time will tell how cryptocurrencies continue shaping up amid a tightened macroeconomic environment.
Digital Galaxy founder and CEO Mike Novogratz says he knows why the crypto markets are getting flushed out lately.
The billionaire tells his 410,000 Twitter followers that as long as bond yields and interest rates go higher, both the stock market and the digital assets market will be under heavy sell pressure.
“As long as rates go higher, we will see pressure on Nasdaq and crypto.”
The business magnate’s warning comes after the US Federal Reserve recently announced it would be raising interest rates on debts this year to counteract the highest inflation rates we’ve seen in four decades.
The crypto industry suffered a widespread pullback today that saw Bitcoin (BTC) drop below the $40,000 mark and top altcoin Ethereum (ETH) tumble down to $2,800, a price it hasn’t seen since last September.
Despite this, interest in investing into crypto assets is on the rise in the financial sector, according to a new report by global business analytics firm FTI Technology.
The paper surveyed 150 US-based decision-makers at financial institutions that have considered investing in digital assets and found that 51% of them view investing in blockchain technology as a high priority within the next 12 months while 44% of them said it is a significant priority. Just 5% said it is a moderate priority.
Furthermore, 88% of respondents said that they’d be at a competitive disadvantage if they do not adopt blockchain technology.
As Preston Fischer, the managing director of FTI Technology’s blockchain and cryptocurrency practice says,
“Investment is beginning to accelerate in digital asset infrastructure across the banking and financial services industry.
Senior leads are recognizing the benefits as they embark to develop strategies for lower cost and faster transactions, access to new markets and facilitation of trustless transactions.”
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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.
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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.
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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.”
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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
Galaxy Digital CEO Mike Novogratz says that Bitcoin (BTC) isn’t done tumbling yet.
As reported by Bloomberg, Novogratz tells NBC in a new interview that he foresees Bitcoin bottoming out at around the $38,000 to $40,000 price level.
The Galaxy Digital CEO is walking back his comments from last week when he said the top crypto by market cap could hold the $42,000 mark.
Novogratz says that he’s going to wait a bit longer before buying more cryptocurrencies, adding that blue-chip investors are waiting in the wings for their opportunity to get in.
“[There is a] tremendous amount of institutional demand on the sidelines.”
The business tycoon and long-time crypto bull then says that a key part of BTC’s bull run in 2021 was the devaluation of fiat currencies around the world.
The U.S. Federal Reserve recently announced it would be tapering its purchasing of bonds while raising interest rates, which is a contributing factor to Bitcoin’s crash, according to Novogratz.
Popular crypto analyst Michaël van de Poppe has a similar prediction as he tells his 550,000 Twitter subscribers that Bitcoin’s crucial support level sits at $41,000.
“Lost the support at $46,000, but sustained above the crucial threshold at $41,000.
As long as that holds, we’ll be fine for Bitcoin.
Simplicity; more and more people are turning bearish which usually happens the closer we’ll get to a bottom.
Just like bullishness grows upwards.”
BTC is currently trading at $43,019, a 15.5% decrease from its 30-day high of $50,840.
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Sber, the Russian government-backed company and the largest bank in the country, is launching a blockchain exchange-traded fund (ETF) to track the performance of major crypto companies such as Coinbase and Galaxy Digital.
Sber Asset Management officially announced the news on Thursday, stating that the new ETF is linked to various blockchain and crypto industry firms, including hardware and software providers for mining and issuing crypto assets.
Called “Sber — Blockchain Economy,” the fund is set to trade under the ticker SBBE and will track the eponymous index developed by Sber’s investment subsidiary SberCIB.
SBBE’s portfolio will include some of the world’s biggest crypto companies, including the United States’ largest exchange Coinbase, Mike Novogratz’s investment company Galaxy Digital and blockchain software provider Digindex.
According to the announcement, Sber’s blockchain ETF will be the “first ETF in Russia to allow investors to make money in the blockchain market without difficulties associated with direct development, buying, holding and selling digital currencies.”
Bitcoin (BTC) staged an impressive recovery after dropping to its three-month low of $42,333 on Dec. 4, rising to as high as $51,000 since.
The BTC price retracement primarily surfaced due to increased buying activity among addresses that hold less than 1 BTC. In contrast, the Bitcoin wallets with balances between 1,000 BTC and 10,000 BTC did little in supporting the upside move, data collected by Ecoinometrics showed.
“Bitcoin is still stuck in a situation where small addresses are willing to stack sats [the smallest unit account of Bitcoin], while the whale addresses aren’t really accumulating,” the crypto-focused newsletter noted after assessing the change in Bitcoin amounts across small and rich wallet groups, as shown in the graph below.
Bitcoin on-chain data featuring fish and whale BTC wallet clusters. Source: Ecoinometrics
Ecoinometrics further asserted that the situation for Bitcoin is “not ideal,” suggesting that the BTC price may end up resuming its decline in the absence of influential buyers.
Bitcoin’s downside target sits near $42K
Ecoinometrics’ bearish outlook appeared as Bitcoin grappled with the Federal Reserve’s policy decision on Wednesday to reduce its bond purchases by $30 billion every month to unwind them down by April next year entirely.
The $120 billion a month stimulus program was instrumental in sending the BTC price from below $4,000 in March 2020 to $69,000 in Nov 2021. And now that the liquidity threatens to go away, with lending to become costlier as the Fed prepares for three rate hikes next year, many fear that it would hurt investors’ appetite for risk assets like Bitcoin.
Bitcoin price briefly popped above $49,000 after the Fed FOMC meeting confirmed at least three interest rate hikes and some adjustments to the current market supporting practices in 2022. https://t.co/TpTX7tGmYL pic.twitter.com/lXw47icZmB
— Cointelegraph Markets (@CointelegraphMT) December 15, 2021
Mike Novogratz, chief executive officer of Galaxy Digital Holdings, admitted that Bitcoin might feel “pain ahead” but anticipated that its price would not fall anywhere beyond the $42,000-support.
“$42,000 is at a pretty important level, and low 40s should hold,” the crypto billionaire told Bloomberg TV in an interview Tuesday, adding:
“So much money is pouring into the space, it would make no sense that the crypto prices would go much below that. If you’re long, it feels painful, but it’s probably healthy.”
In reality, unique wallets holding more than or equal to 1,000 BTC have been declining all across 2021, with data from Glassnode showing its number dropping to 2,147 from 2,475 since Feb. 9.
The total number of Bitcoin addresses with at least 1,000 BTC balance. Source: Glassnode
In contrast, the number of unique wallets holding at least 0.01 BTC (around $485 at current exchange rates) rose in 2021, from 8.46 million to 9.39 million year-to-date.
Meanwhile, addresses holding at least 0.1 BTC (~$4,855) surged from 3.12 million to 3.30 million in the same period, indicating that “fishes” played a key role in pumping the Bitcoin price from around $30,000 to as high as $69,000 this year.
The total number of Bitcoin addresses with at least 0.01 BTC and 0.1 BTC balance. Source: Glassnode
One more piece of evidence showing that retail investors have been bullish on Bitcoin, came from addresses that hold at least 1 BTC.
Related: Analysts expect Bitcoin trend change after Fed lays out its 2022 roadmap
These wallets decreased in quantity in the first half of 2021 as the BTC market grappled with the China ban and other negative news, but started increasing the second half as El Salvador adopted Bitcoin as its legal tender.
The total number of Bitcoin addresses with at least 1 BTC balance. Source: Glassnode
The number of Bitcoin wallets with at least 1 BTC also kept rising during the BTC price correction from $69,000 to $42,333 in the November-December session, signaling accumulation. It reached a seven-month high on Wednesday just as Bitcoin underwent a rebound to $50,000 from its weekly low near $46,000.
On-chain analyst Willy Woo also spotted retail accumulation rising to levels seen after the March 2020 crash, which led to Bitcoin’s two-year-long bull run.
Accumulation among wallets holding less than 1 BTC. Source: WIlly Woo
Additionally, Bitcoin’s momentum indicator that preceeded its price breakout to $69,000 earlier this year is also hinting at a potential BTC price breakout ahead.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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.
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
Galaxy Digital, a cryptocurrency brokerage and merchant bank founded by billionaire investor Michael Novogratz, announced on Monday that it would be issuing $500 million in exchangeable senior notes to accelerate business initiatives. The debt is convertible into company equity and bears an interest rate of 3% per annum, with maturity in 2026. New expansion areas include non-fungible tokens, or NFTs, with the firm committing $62 million of its capital into 22 NFT related companies since the start of the year.
Over the years, Galaxy Digital founder and CEO Mike Novogratz has been a famed bullish investor of Bitcoin (BTC) and other cryptocurrencies. He has called on other investors to allocate anywhere between 1% to 5% of their portfolio into crypto. Under his guidance, the firm’s assets under management surpassed $3 billion in an update provided in October and have become one of the largest digital currency investment companies in the world.
The company is registered in the Cayman Islands, and its shares are listed on Canada’s Toronto Stock Exchange. However, it is in the process of restructuring to list its shares in the United States next year. The U.S. Securities and Exchange Commission has yet to approve of its potential listing.
In the past quarter, Galaxy Digital’s net income from trading, investment, asset management, crypto mining, and other corporate sources amounted to $517.1 million, increasing from $41.5 million from the prior year’s quarter. Shares have gained 405.4% year over year to $23.51 (converted from Canadian dollars) apiece as of Nov. 29.
Billionaire investor Mike Novogratz is concerned that Jerome Powell’s renomination for a second term as the Federal Reserve chairmancould slow down the growth of the cryptocurrency market.
The founder and CEO of Galaxy Investment Partners’ revelations come as an overall investor and not as a Bitcoiner.
Speaking in an interview with CNBC’s “Crypto Night in America” on November 24, Novogratz said that after Powell’s reappointment, the “macro story has changed a little bit” and that “people are getting pretty bearish” on crypto assets.
Cryptocurrency prices are down following Powell’s nomination to lead the Fed next year and Novogratz believes that his appointment could disrupt crypto prices even further.
Novogratz explained that Powell recently got reappointed and that may allow him to act more like a central banker than a person who does not want to be reappointed.
The appointment could mean a significant change to the US monetary expansion policy, cryptocurrency regulation, and US digital currency agenda.
Novogratz sees that with the appointment, Powell is likely to move faster to raise interest rates and tighten policy than his previous leadership working as Fed chair.
“We have inflation showing up in pretty bad ways in the US. So, we can see the Fed is going to have to move a little faster … That would slow all assets down. It would slow the Nasdaq down. It would slow crypto down if we have to start raising rates much faster than we thought,”Novogratz elaborated.
But now the Fed is grappling with the highest inflation in 31 years. It has already trimmed the rate at which it is buying bonds. Minutes from its last monetary policy decision, released on Wednesday showed that officials are open to dealing down quantitative easing even faster.
According to CME group’s FedWatch tool, the financial markets show investors now think that the Federal Reserve could increase interest rates in the second half of the next year.
Bitcoin and other cryptocurrencies are among many assets that have been lifted by the flood of money from the Fed in the last year and a half.
In the past, Novogratz predicted that Bitcoin would hit $100,000 by the end of this year, but now he said that looks unlikely. According to CoinMarketCap, Bitcoin was down 2.26% on Thursday to $57,356.63.
What Does This Mean for Crypto Markets?
As reported by Blockchain.News on November 22, President Joe Biden reappointedRepublican Federal Reserve chairman Jerome Powell for a second four-year term. The battled-tested centrist leaderenjoys strong bipartisan support and has helped lift the US economy out of the Coronavirus recession.
Powell has overseen the biggest monetary stimulus in US history to assist the economy to cope with the Covid-19 pandemic.
Biden also appointed Democratic Fed Governor Lael Brainard as vice-chairperson for the Fed’s Board of Governors, succeeding republican Richard Clarida.
The decision closes a weeks-long race between Powell and Brainard for the country’s top economist post. Biden reportedly considered Brainard more seriously in recent days under pressure from progressive Democrats after Powel initially seemed assured of his position. Brainard has taken a tougher stance than Powell on banking regulations.
President Biden said that with massive uncertainty facing the US economy, the country needed stability at the Federal Reserve. The president stated that Powell has provided the stability that is valuable in the Fed chair.
Although investors value the stability Powell brings, chances are that he may raise interest rates more quickly than Brainard and that could hurt technology and communication stocks and even crypto markets
The impact of rising interest rates may reduce investments in speculative assets such as cryptocurrencies. Since Bitcoin does not provide investors with interest payments, rising interest rates could make a digital currency less appealing to market participants. Bitcoin’s supply changes very gradually, and therefore any reduction in demand could prove bearish for prices.
