Novogratz company Galaxy Digital makes 141 million USD loss

Not only investors, but also crypto companies suffer from the bear market which has been taking place since the beginning of the year. As has now become known, Galaxy Digital Holdings LP, the crypto-currency trading bank founded by the well-known crypto investor Mike Novogratz, has incurred losses of 136 million US dollars this year, 41 million of which were incurred in the third quarter of 2018 alone.

Novogratz, a former partner and renowned hedge fund manager at Goldman Sachs, jumped on the crypto bandwagon as prices for crypto currencies rose in recent years. His company is required to present detailed financial statements, which provides rare insight into the impact of low and falling prices throughout the year.

As Bloomberg reports, the losses were mainly caused by the loss of positions in Bitcoin (BTC), Ethereum (ETH) and XRP. It is therefore noteworthy that the considerable losses of the last weeks (Q4) have not yet been taken into account and probably mean much larger losses. More specifically, it is interesting to note that the realised losses in the third quarter of 2018 consisted mainly of ether sales, as opposed to the relatively small losses from BTC and XRP positions. Interestingly, in response to the hype surrounding Ethereum Classic, the company also held a small position in ETC, which enabled it to make a $1.9 million profit on the Ethereum alternative.

Galaxy Digital attributed its poor trading results in the third quarter to low trading volumes in the market and increased competition for arbitrage opportunities.

While we continue to improve and strengthen our trading business, the lack of a general trading volume in crypto currencies was a headwind,

said a representative of the company. He said that the market value of the assets, minus the short positions, was $90.6 million at the end of September and that the assets cost $172.7 million.

Latest recently Mike Novogratz told the Financial Times that his company is struggling hard in 2018:

2017 was just fun, it was almost stupid. But this year has been a challenge. It sucks to set up a business in a bear market. In most traditional shops, such as Goldman Sachs, you don’t have to worry. There is no existential threat to these companies out there.