Mike Novogratz to Launch Crypto Merchant Bank in $400m Investment
When it comes to cryptocurrency proponents on Bitcoin, Michael Novogratz is one of the most well-known. As an ex Goldman and hedge fund trader, he has come out in the past and chastised his fellow Wall Streeters as "old".
He has also put his money where his mouth is and has invested considerable amounts of his own assets into cryptocurrencies. Last year, Mike was attempting to start a large cryptocurrency hedge fund until the market volatility caused him to abandon that idea.
Now, he is embarking on a much larger undertaking. In a press release, Bradmer Pharmaceuticals announced that they will be partnering with Novogrataz's firm, Galaxy Digital, to launch a full service crypto merchant bank. According to an extract
The Proposed Transaction will establish Galaxy Digital as a full service, digital assets merchant bank, with distinct trading, asset management, principal investment, and advisory business lines
Back With A Vengeance
Mike put his hedge fund on hold last year as he claimed that he did not like the market conditions and thought that a "pause" was in order. Perhaps this may have been a good choice at the time as it allowed him to reassess needs.
Now, he is staking his own personal funds in the project. The capital that is raised from investors such as Novogratz will be used to form this Crypto merchant bank that will be listed on the Toronto TSX Venture Exchange. According to the statement
Galaxy Digital will leverage its deep ties into Bitcoin, Ethereum and other protocol communities to drive returns from four core business segments
The bank will also operate a trading arm as well as a principle investing function as it injects capital into promising ICOs. They will also make use of the knowledge and skills of those on board the project with an advisory and consulting business in First Coin.
Indeed, the way that they have described the business it sounds like the traditional scope of some of the large investment banks that Novogratz used to work at. It will advise, raise capital, trade and facilitate banking.
From a company structure perspective, it will be a reverse take-over where all of the companies will be incorporated under the structure of Galaxy Digital which is based in the Cayman Islands. Mike will be the initial chairman of the board of directors of Bradmer.
Possible Game Changer?
If there is one thing that nearly every cryptocurrency user will know, it is the great disdain that traditional financial institutions display for the revolutionary technology of crypto. From comments by Jamie Dimon at JP Morgan to banks closing down customer accounts, traders have seen it all.
It is therefore quite a reprieve to see that a full service crypto financial institution may soon be opening up its doors. It will allow blockchain start-ups to raise funds, traders to bank and other financial institutions to buy.
It is perhaps quite ironic that an ex investment banker could seriously be disrupting Wall Street.
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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.