Mike Novogratz
Bloomberg / YouTube

Michael Novogratz, the CEO of cryptocurrency-focused merchant bank Galaxy Digital LP (GLXY), recently opened up about just how difficult it is to build a business during the ongoing cryptocurrency bear market.

In a recent interview with the Financial Times, the former Goldman Sachs (GS) partner and Fortress hedge fund manager discussed his efforts towards building Galaxy Digital into the “Goldman Sachs of crypto.”

“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,” said Novogratz.

These difficulties are highlighted by the more than 37% drop in Galaxy Digital shares since it opened for trading on Canada’s TSX Venture Exchange. The company had losses of $134 million in the first quarter of the current fiscal year, comprised of $85.5 million in unrealized losses on digital assets and $13.5 million in losses in its trading business. However, the Q2 saw a slight turnaround to the tune of $35 million in net income, as trading arm losses were reduced to $1.4 million.

The uncertainty surrounding his businesses is a troubling reality for Novogratz, who reportedly put his entire crypto net worth ($302 million) into the venture. What’s worse is the fact that many are questioning his underlying business model that is so dependent on a largely speculative asset class.

“For him to say something is going to happen with price, he’s trying to predict something that he has no influence over,” said Tim Swanson, founder of fintech advisory firm Post Oak Labs.

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Nonetheless, Novogratz continues to push forward, often making highly bullish price targets because, well, he has no other choice.

“You’ll see that flip next year,” he said. “That’s when prices start moving again.”
More: Mike Novogratz struggles to build crypto bank in bear market
Recent: Novogratz: Bitcoin (BTC) Will Reach New Highs in 2019

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

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