CEO of Galaxy Digital LP (GLXY), Mike Novogratz, of recent explained how difficult it is to build a business during this current crypto bear market.
Recently, in an interview with the Financial Times, the former Goldman Sachs (GS) partner talked about his efforts towards transforming Galaxy Digital into the “Goldman Sachs of crypto.” He said: “2017 was just fun, it was almost stupid. [But] this year has been challenging. It sucks to build a business in a bear market… [Staff] anxiety levels go up when crypto goes down…In most traditional business, [such as] Goldman Sachs, you don’t worry. There’s not an existential threat out there.”
These difficulties are seen in the over 37% drop in the shares of Galaxy Digital since it opened for trading on TSX Venture Exchange of Canada. In the Q1 of the present fiscal year, the company saw losses of $134 million, which comprises of $85.5 million in digital assets’ unrealized losses and $13.5 million as trading business losses. However, the second quarter saw a slight turnaround to the tune of $35 million in net income, as trading arm losses were reduced to $1.4 million.
The lack of certainty surrounding his businesses is a troubling reality for Novogratz, who of recent put his whole crypto net worth ($302 million) into the venture. The worse part is that a good number of people are questioning his underlying business model that is very dependent on a largely speculative asset class.
Despite, Novogratz keeps pushing forward, frequently making highly bullish price targets. He said: “You’ll see that flip next year. That’s when prices start moving again.”