Investments

Galaxy Digital saw $272.6M loss in 2018

Quick Take

  • Mike Novogratz’s Galaxy Digital saw significant losses across 2018, according to annual financial results
  • He says he’s more optimistic about crypto today than he was in November

Crypto merchant bank Galaxy Digital has posted a $273 million loss in 2018 according to its annual filing.

The news comes after a difficult 12 months for Galaxy, which operates an over-the-counter trading desk in crypto as well as an investment and venture capital arm. The firm’s Q1 filing last year showed $13.5 million in realized losses in the firm’s trading business and another $88.5 million in paper losses related to crypto, amid the price plunge at the start of 2018. It was also subpoenaed by US regulators, according to sources familiar with the situation and later shut down its ICO advisory business and an office in Vancouver Canada, as The Block previously reported

“Q4 in crypto felt a little bit like watching Game of Thrones last night, “Galaxy CEO Novogratz said on a shareholder update conference call Monday, comparing the market to a bloody war. “The [comapny] results on the year weren’t great by any means…But it’s a little deceiving because for me what matters is the operating loss is and what our cash book does.”

Novogratz owned just shy of 80% of the firm as of January this year.

The investment portfolio is down around 36%, but Novogratz says they “outperformed the market,” and businesses were “doing better across the board” since the market pick-up in recent months. He noted that they were still onboarding around 100 new customers, few of whom were institutional, but noted revenues were far improved from last year

He added: “Our goal this year is to get our operating business as close to breaking even as possible…We’re off to a good start in the first few months. I’m more optimistic than I was 4 months ago; [] Winter came and Spring is just about here.”

The filing comes just in time, as the publicly-listed hedge fund had until tomorrow to report under the Toronto stock exchange’s 120-day rule for venture firms. It also comes days after Galaxy confirmed CTO Mike McMahon, had left the firm.

The income statement can be seen below: