Galaxy Digital

'Fire in the cauldron’ as Coinbase, Marathon surge over 300% in 2023

The anticipated Bitcoin halving and potential ETF approvals have lit “some serious fire in the cauldron” for crypto, said Zerocap investment chief Jon de Wet.

Publicly traded crypto firms have notched triple-digit percentage returns this year and closed up in green on Dec. 4, as Bitcoin (BTC) reached a new year-high of over $42,000. 

Crypto exchange Coinbase (COIN) closed the day at just over $141 with a 5.5% gain, up 320% from its price at the start of the year, per Google Finance data.

Bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) closed the day with over 8% gains, recording 337% and 345% year-to-date (YTD) gains, respectively.

A visual map of the one-day price of S&P 500 stocks shows mixed results on Dec. 4 Source: Finviz

Crypto investment firm Galaxy Digital Holdings (GLXY) posted a daily gain of nearly 12% and is up 155% YTD and MicroStrategy (MSTR) — with the largest Bitcoin holdings of any public company valued at over $6.6 billion — saw a daily gain of over 6.5% and a YTD rise of 288%.

It comes despite the wider North American stock market seeing a mixed bag of gainers and losers on Dec.

Large-cap tech stocks, such as Microsoft, fell 1.43% on Dec.

The crypto-related stocks are well below their all-time highs, however.

IG Australia market analyst Tony Sycamore told Cointelegraph the crypto-related stock rally is “coming off the back of Bitcoin’s spectacular gains in recent months,” which is up nearly 152% YTD and is closing in on $42,000 — it has already hit a 19-month high.

Sycamore said investors see crypto stocks as a way to gain crypto exposure until the United States approves spot Bitcoin exchange-traded funds (ETFs).

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‘Fire in the cauldron’ as Coinbase, Marathon surge over 300% in 2023

The anticipated Bitcoin halving and potential ETF approvals have lit “some serious fire in the cauldron” for crypto, said Zerocap investment chief Jon de Wet.

Publicly traded crypto firms have notched triple-digit percentage returns in 2023 and closed in the green on Dec. 4, with Bitcoin (BTC) reaching a new year-high of over $42,000.

Crypto exchange Coinbase closed the day at just over $141, a 5.5% gain and a 320% rise from its price at the start of 2023, according to Google Finance data.

Bitcoin miners Marathon Digital and Riot Platforms closed the day with over 8% gains, recording 337% and 345% year-to-date (YTD) gains, respectively.

A visual map of the one-day price of S&P 500 stocks shows mixed results on Dec. 4 Source: Finviz

Crypto investment firm Galaxy Digital Holdings posted a daily gain of nearly 12% and is up 155% YTD.  MicroStrategy — with the largest Bitcoin holdings of any public company valued at over $6.6 billion — saw a daily gain of over 6.5% and a YTD rise of 288%.

It comes despite the broader North American stock market seeing a mixed bag of gainers and losers on Dec.

The crypto-related stocks are well below their all-time highs, however.

IG Australia market analyst Tony Sycamore told Cointelegraph the crypto-related stock rally is “coming off the back of Bitcoin’s spectacular gains in recent months,” which is up nearly 152% YTD and is closing in on $42,000, already hitting a 19-month high.

Sycamore said investors see crypto stocks as a way to gain crypto exposure until the United States approves spot Bitcoin exchange-traded funds (ETFs).

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Coinbase market share grows outside US trading hours amid Binance saga: Report

According to Kaiko Research, Bybit experienced a rise in market share around the clock, whereas Coinbase witnessed significant growth outside of the United States trading hours.

Following cryptocurrency exchange Binance reaching a substantial multi-billion-dollar settlement with United States regulators last week, an on-chain data analytics firm reported a surge in Coinbase’s market share.

On November 21, Binance and the United States Department of Justice (DoJ) reached a settlement of $4.3 billion, settling allegations related to anti-money laundering.

However, the legal challenges have led to other crypto exchanges seeing an increase in market share, according to research firm Kaiko Research.

The firm recently published a report that indicates that Coinbase has seen an uptick in its trading volume, during the European trading day, outside the regular United States trading hours:

“Coinbase’s share grew the most outside of U.S. trading hours (14-22 UTC), instead surging in the middle of the trading day in Europe and the beginning of the trading day in eastern Asia.”

Meanwhile, Bybit is reportedly seeing significant changes across the entire day.

“Bybit is the immediate standout winner, gaining market share in every single hour and growing by more than 20% in 16 out of 24 hours,” the report stated.

Percentage change in BTC market share.

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Binance settlement ‘net positive’ for cryptocurrency industry — Mike Novogratz

Galaxy Digital CEO Mike Novogratz believes Binance has satisfied regulators and users after its $4.3 billion settlement with United States authorities.

Binance’s $4.3 billion settlement with the United States Department of Justice (DOJ) is being hailed as a positive move for the company and the wider cryptocurrency industry, according to Galaxy Digital’s Mike Novogratz.

In an interview with Bloomberg on Nov.

“I think they’re de-risked in lots of ways. There’s a lot less to worry about now.”

Novogratz also weighed in on the considerations for major investment firms dealing with exchanges, as well as traditional finance (TradFi) players, with regulatory oversight continuing to take center stage in the United States.

Binance didn’t steal money

The Galaxy Digital CEO said that a reasonable approach underpinned by investments and relationships with companies that “take their jobs seriously” remains key while stressing that mainstream finance has also found itself on the wrong side of regulators in recent years.

“If you went through the list of TradFi banks who have been sanctioned or fined by different regulators in the last 24 months, it’s a shocking list.

Related: FTX collapse, Binance’s US settlement provide strong case for MiCA regulations

He added that concerns over Binance potentially being shut down or that the exchange had “stolen people’s money” in a situation similar to FTX simply was not the case:

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The government should fear AI, not crypto: Galaxy Digital CEO

Galaxy Digital CEO Mike Novogratz believes regulators have got it “completely upside-down” on crypto vs AI regulation.

Mike Novogratz, the CEO of digital asset investment firm Galaxy Digital told investors he is shocked over the amount of regulatory attention for crypto rather than artificial intelligence (AI), a technology he believes will trigger a “deep fake” identity crisis.

The chief executive explained at the firm’s fourth-quarter conference call on March 28 that the U.S. government has it “completely upside-down” in choosing to focus so much on crypto regulation and yet turn a blind eye to AI:

“When I think about AI, it shocks me that we’re talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government’s got it completely upside-down.”

This concern appeared to stem from Novogratz’s fear that AI will trigger a “deep fake” identity crisis.

“In lots of ways, one of the best use cases for crypto is going to be identity around AI, because pretty soon you’re going to get a fake Mike Novogratz, hopefully with hair […] how do you prove identity in a world like that?” he said.

However, he believes blockchain-based applications will play a “huge role” in combating some of the issues presented by AI:

“Crypto and blockchain is going to have a huge role in that. It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period.”

That said, the U.S. Commodity Futures Trading Commission recently engaged in talks about AI and its impacts with the Technology Advisory committee last week.

Seller exhaustion, China easing

As for the current state of the market, Novogratz said “seller exhaustion” and the reopening of China has helped the crypto industry recover remarkably thus far in 2023.

“All the selling that needed to get done got done, right? There was so much bad news, if you had to sell, panic selling and just the nervousness of “Oh my God! This thing could go to zero,” and people were in sheer panic, you had seller’s exhaustion,” he said.

Following a tough zero-COVID approach by the Chinese government, Novogratz said he has since noticed more crypto activity coming out of China.

“China took the regulatory boot off the necks of their tech companies, and that includes crypto, [so] you’re seeing more activity from Asia.”

Related: Could Hong Kong really become China’s proxy in crypto?

From a more technical lens, Novogratz was confident that the crypto market will continue in an upwards trajectory throughout the remainder of 2023:

“The market feels strong, and when I look at it technically on charts, we’ve had big weekly closes. I’m surprised to hear myself say this, given where my mindset was in late December, but it would not surprise if we were substantially higher three months, six months, nine months from now.”

The strong rebound in the crypto market reflected well on Galaxy’s balance sheet too with the firm today revealing in its quarterly results that it finally swung back into profit after a tough loss of $1 billion in 2022.

Magazine: Crypto winter can take a toll on hodlers’ mental health

Galaxy Digital swings to profit after $1B net loss in 2022

The Mike Novogratz-led digital asset firm recorded a pre-tax income of $150 million during most of Q1 2023.

On March 28, Canadian investment firm Galaxy Digital, operated by blockchain personality Mike Novogratz, disclosed that it had achieved a preliminary pre-tax income of $150 million from Jan. 1, 2023, to March 24, 2023. 

The results followed a $1-billion net loss in 2022, which was largely attributed to a $659-million unrealized loss on digital assets and a $496-million unrealized loss on investments. As told by Novogratz:

“2022 was a formative year for Galaxy, and while we and our industry faced unprecedented macroeconomic events, we succeeded in staying the course and were able to opportunistically take advantage of strategic opportunities to build our operating businesses for the future.”

On May 19, 2022, Novogratz claimed that he was “permanently humbled” by the collapse of the $40-billion Terra ecosystem and reiterated the crypto industry “looks stronger than ever and wouldn’t be going away any time soon.” A year earlier, on Feb. 3, 2021, Cointelegraph reported Galaxy Digital invested $25 million into the Terra protocol. Galaxy Digital reported a net income of $1.7 billion in 2021 during the height of the crypto bull market. 

In August 2022, Galaxy Digital reportedly dropped its plans to go public in the United States after terminating a $100-million deal to acquire digital asset custodian BitGo. Later in November, the firm disclosed a $77-million exposure to bankrupt cryptocurrency exchange FTX, with $48 million likely locked in withdrawals. 

By the end of 2022, partner capital in the firm declined from $2.6 billion to $1.4 billion year-over-year. Despite setbacks, Novogratz said the firm has a strong liquidity position of $957 million. Among other items, the company projects its subsidiary, Galaxy Mining, will have grown its Bitcoin (BTC) mining hash rate to 4 exahashes per second by the end of this year, partly aided by its $65-million acquisition of Argo Blockchain’s flagship Helio facility. 

Magazine: 5 years of the ‘Top 10 Cryptos’ experiment and the lessons learned

US credit crunch means it’s time to buy gold and Bitcoin: Novogratz

The Galaxy Digital CEO predicts tough times ahead for the United States economy but continues to be bullish on crypto.

The United States is headed for a credit crunch and now is the right time to buy gold, silver and Bitcoin (BTC), says Galaxy Digital founder and CEO Michael Novogratz.

“We are going to have a credit crunch in the U.S. and globally,” Novogratz said in an interview on CNBC. “You want to be long gold and silver […] and you want to be long Bitcoin,” he said.

Speaking on CNBC’s Squawk Box on March 15, Novogratz noted that banks typically rebuild capital by lending less, meaning that a credit crunch is imminent, noting that indicators like the commodities market are already pointing to a recession.

The U.S. banking industry fell into turmoil this month, with Silvergate Bank, Signature Bank and Silicon Valley Bank all collapsing in the same week. Moody’s downgraded the U.S. banking system outlook to “negative.”

Related: Blame traditional finance for the collapse of Silicon Valley Bank

Novogratz told CNBC that a reversal in interest rate policy was in the cards, saying that while the Federal Reserve would “like to do a dovish hike, just for credibility’s sake,” doing so would be a “huge policy error.”

Alongside his prediction of tough times for the U.S. economy, Novogratz expressed a bullish sentiment for crypto, saying:

“If there was ever a time to be in Bitcoin and crypto, this is why it was created, in that governments print too much money whenever the pain gets too great, and we’re seeing that.”

The price of Bitcoin dipped after the collapse of Silicon Valley Bank last week but managed to reach new 2023 highs of $26,514.72 on March 14, according to CoinMarketCap.


Galaxy tips Bitcoin NFT market to hit $4.5B by 2025

Galaxy’s estimation was based on the rapid uptick of interest in Bitcoin NFTs, currency market infrastructure, and the potential to take some market share away from Ethereum.

In a “base case” scenario, Galaxy Digital’s research unit has tipped the burgeoning Bitcoin nonfungible token (NFT) market to hit a $4.5 billion market cap by March 2025.

Bitcoin NFTs, or Ordinals, have attracted significant attention since the Ordinals protocol launched in late January, enabling users to inscribe data such as images, PDFs, video and audio onto individual satoshis — each representing 0.00000001 Bitcoin (BTC).

NFT giants such as Yuga Labs have even jumped in on the hype. On Feb. 28, the $4 billion firm behind the Bored Ape Yacht Club announced a Bitcoin-based NFT project dubbed “TwelveFold” in a notable recognition of the Ordinals movement.

In a new report published on March 3, Galaxy researchers analyzed the potential growth of Bitcoin NFTs, making estimations “conservatively based on the current size of Ethereum’s NFT market” and its growth rate over the past few years.

“While there are notable differences between inscriptions and NFTs, it’s fair to say that a native on-chain ecosystem for NFTs has emerged on Bitcoin in a way that was never before possible, and its usage has been exploding.”

The report provided three market cap predictions based on the firm’s analysis, covering bear, base and bull case scenarios.

Looking at Galaxy’s baseline analysis, the report outlined that if Bitcoin NFTs can “expand to mainstream NFT culture like PFPs [Profile Pictures], memes and utility projects,” the market capitalization should increase to $4.5 billion.

The researchers also noted that the projection of $4.5 billion is also based on the “rapid development in inscription awareness coupled with the marketplace/wallet infrastructure already out today.”

In a bear case, in which Bitcoin NFTs don’t creep into the mainstream NFT market and pry market share away from Ethereum, Galaxy estimated that Bitcoin NFTs can still reach a market cap of $1.5 billion based on the current level of interest and supporting infrastructure.

Related: Total crypto market cap takes a hit amid Silvergate Bank crisis

On the bullish side of things, Galaxy researchers estimate that the Bitcoin NFT market could reach around $10 billion if it provides strong competition to Ethereum NFTs while providing unique use cases.

Estimated Bitcoin NFT market cap. Source: Galaxy Digital

At the time of the report, more than 250,000 Ordinals have hit the market. Highlighting the significance and utility of Bitcoin NFTs, the researchers noted that:

“The addition of sizeable data storage with strong availability assurances opens up a variety of use cases, many of which are only beginning to be explored, including things like new types of decentralized software or Bitcoin scaling techniques. Even the NFT use case alone, though, has the potential to dramatically widen the scope of Bitcoin’s cultural impact.”


Galaxy acquires institutional crypto custody firm for $44M

Galaxy Digital invests $44 million to acquire institutional cryptocurrency custody platform GK8.

Galaxy Digital has invested $44 million into an institutional cryptocurrency custody platform to tap into its proprietary asset storage and management capabilities.

Mike Novogratz’s cryptocurrency investment firm has completed the acquisition of GK8, which has developed its own patent cryptocurrency custody technology aimed at giving secure asset management for institutional users.

The service specializes in providing cold vault technology that allows the execution of transactions without internet connectivity. Its in-house multi-party computation (MPC) vault provides the ability to automate transactions, and the service also provides access to decentralized finance networks, tokenization, NFT and trading.

A statement from Novogratz highlighted increased investor demand for custody services as a key reason behind the acquisition. GK8’s cold storage solutions and wallet technology will be onboarded into Galaxy Digital’s upcoming prime brokerage platform GalaxyOne.

The business deal will see Galaxy add an office in Tel Aviv to its organization, with nearly 40 GK8 employees becoming part of the wider group. GK8 founders Lior Lamesh and Shahar Shamai stay on through the acquisition to lead Galaxy’s custodial technologies offering.

Related: Mike Novogratz calls Helios a ‘transformative acquisition’ for Galaxy

GalaxyOne is touted to offer a broad range of cryptocurrency financial services to institutional-grade users on its launch. This will include trading, lending, derivatives, cross-portfolio margining as well as custodial offerings managed by GK8.

Galaxy doubled down on its investments into the cryptocurrency mining sector in December, announcing a $65 million acquisition of Argo Blockchain’s main mining operation. The mining firm had to sell off its Helios mining facility to avoid bankruptcy during a tough year for the sector. 

Galaxy Digital CEO ‘wouldn’t be surprised’ if Bitcoin hit $30K this quarter

Recent positive Bitcoin price action has been linked to a slowdown in U.S. inflation, and Mike Novogratz thinks the price rally could sustain until the end of March.

Galaxy Digital Holdings CEO Mike Novogratz believes there’s a chance Bitcoin (BTC) could return to $30,000 or above before the end of March.

According to a Feb. 15 Bloomberg report, Novogratz spoke at a Bank of America conference the same day and said he would’ve been the “happiest guy” if 2022 ended with BTC at $30,000, but added:

“When I look at the price action, when I look at the excitement of the customers calling, the FOMO building up, it wouldn’t surprise me if we were at $30,000 by the end of the quarter.”

The prediction is much lower than others Novogratz has made in the past. The Galaxy CEO once believed that Bitcoin could reach $500,000 by the end of 2027 if the United States Federal Reserve kept hiking interest rates.

During Wednesday’s conference, Novogratz again made mention of the rate hikes by Fed chair Jerome Powell, who most recently announced an interest rate hike of 25 basis points on Feb. 1. Novogratz said he didn’t expect the Fed to change its tune anytime soon:

“What makes me skeptical that we can have the explosive, back-to-the-old highs this year is Chairman Powell. He’s really doing what he says he’s going to do, and I don’t see the Fed pivoting and cutting anytime soon.”

Alongside the Fed’s February rate hike, Powell indicated inflation in the U.S. had begun to slow, which saw Bitcoin shortly spike above $24,000 before declining below $22,000.

Related: US lawmakers reintroduce bill to remove roadblocks for crypto investments in retirement accounts

Following the U.S. Consumer Price Index readout for January coming in roughly as expected on Feb. 14, Bitcoin gained nearly 12% in 24 hours and hit over $24,700 — its highest level since mid-August, according to Cointelegraph data.

Sentiment toward crypto also appears healthy, with the Crypto Fear and Greed index climbing nine points to 62 out of 100 and moving the scale from “neutral” into “greed” territory.

The one-year chart of the Fear and Greed Index shows it last reached a score of 60 on March 28, 2022. Source: Alternative

Bitcoin would still need to gain roughly another 22% by March 31 to reach Novogratz’s predicted price.