Galaxy Digital Holdings, a cryptocurrency merchant bank owned by billionaire Mike Novogratz, reported a loss of $76.65 million in Q3 2018 alone. The reason for such underperformance lies in the cryptocurrency market downfall.
“The current quarter loss was largely a result of realized loss on digital assets, unrealized loss on investments, an impairment loss on goodwill and equity based compensation accruals,” – the company’s latest report reads.
All in all, Galaxy Digital has lost $175.68 million during the first nine months of this year.
Galaxy Digital was founded on November 30, 2017. The company holds the great bulk of its investment capital in BTC and ETH, these cryptocurrencies having lost 54.6% and 82.1% in value since January 9, 2018. Besides the bear market, there has been a considerable trade performance slump in the crypto industry, which has led to a narrower spreads for arbitrage activity, the company reports.
“While we continue to improve and strengthen our trading business, lack of overall trading volume in cryptocurrencies has been a headwind for the business,” – the report reads.
The heaviest losses were brought by the company’s cryptocurrency trading division ($150.74 million by the end of Q3 2018).
The report, nevertheless, points out the increasing use of cryptocurrencies and blockchain in recent months. In particular, the opening of Bakkt (trading platform for investment companies which is to be launched by the International Exchange (ICE) in January 2019) and Fidelity cryptocurrency depository, are mentioned as advances that would “lead to wider adoption of blockchain and cryptocurrencies” and thus “increase trading volumes and prices, which should benefit all of our businesses”.
Earlier this month, CEO Galaxy Digital Mike Novogratz voiced his belief that BTC price will reach $20 000 in 2019. He opined that such a price surge will result from the renewed interest in bitcoin on the part of institutional investors, which is to be fueled by the newly launched Bakkt and Fidelity Digital Asset Services platforms.