Novogratz’s Galaxy Digital Crypto Fund Lost $272.7 Million in 2018 – CoinDesk


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Galaxy Digital Holdings, the crypto merchant bank founded by former hedge fund manager Michael Novogratz, lost $97 million in the fourth quarter, according to financials disclosed Monday.

The net loss widened from $76.7 million in the third quarter and from about $100,000 a year earlier, according to the filing with Canadian securities regulators. (Last February, New York-based Galaxy bought a Canadian publicly traded company in a reverse takeover.)

For all of 2018, its first full year of operation, the company lost $272.7 million.

The majority of the red ink in 2018, $101.4 million, came from selling digital assets at a loss.

Galaxy also recorded $75.5 million in paper losses on crypto it held that declined in price, $8.5 million in unrealized losses on investments in companies and $88.4 million in operating expenses.

Which coins lost

At the end of 2018, Galaxy held 9,724 bitcoin ($36.4 million), 92,545 ether ($12.3 million), 2.4 million EOS ($6 million) and 60,227 of monero ($2.8 million).  The firm increased its investment in bitcoin and ether from the beginning of the year when it held 5,902 BTC and 57,000 ETH.

Galaxy also used to hold large amounts of Wax ($50.2 million) and BlockV tokens ($17.4 million), which disappeared from the top ranks of the firm’s investments at the end of the year.

According to the report, Galaxy lost money selling bitcoin ($70.3 million) and ether ($64.4 million), which was partially offset by $54.3 million earned selling some cryptocurrencies short (it’s not specified which ones).

Bitcoin was the biggest source of losses at the beginning of 2018, while ether caused the most damage during the rest of the year.

Interestingly, Galaxy lost as much as $47 million on the depreciation of the Wax token, an asset created to power a platform for trading virtual goods like items in video games.

Several other altcoins also lost in price before Galaxy could profitably sell them during 2018: Kin ($10.9 million in losses), BlockV ($17.2 million) and Aion ($8.6 million). Some $5 million was also lost on EOS.

Protocols, mining and ICOs

A number of companies and investment funds in Galaxy’s portfolio declined in value.

For example, the Pantera ICO Fund LP shares’ depreciation caused the loss of $14.1 million (Galaxy currently has $17.4 million invested in the fund). The firm also took a haircut of $11.3 million on its shares of Canada-based Hut 8 Mining Corp, and $11.1 million on crypto wallet firm Xapo.

As of the end of 2018, Galaxy held $41.9 million in the stock of Block.One’s, the creator of EOS, plus some $5 million more in Galaxy EOS VC Fund focused on developing the EOS.IO ecosystem.

Meanwhile, payments startup Ripple Labs received $23.8 million, including “an indirect investment through a special purpose vehicle,” the report says.

Galaxy also invested $26 million in mining businesses, including Hut 8 Mining and Bitfury; $7.5 million in custodian and multi-signature wallet provider BitGo; and $5 million in Bakkt, the bitcoin futures exchange yet-to-be-launched by New York Stock Exchange parent ICE.

Other investments include Silvergate Capital Corporation, parent of the crypto friendly Silvergate Bank; tokenization startups AlphaPoint and Templum; investment vehicles Cryptology Asset and Pantera Venture Fund; and Mercantile Global Holdings, a Puerto Rico-based entity operating the recently founded San Juan Mercantile Exchange. The firm also provided $3.8 millions of loans for the crypto lending platform BlockFi.

Risk factors

Talking about the risks Galaxy may face in the future, the report pays special attention to the concentration of power in the hands of the CEO and major stakeholder Mike Novogratz, who owns more than 71 percent of Galaxy.

Among the regulatory and market risks, Galaxy is “highly dependent on Michael Novogratz, exposing shareholders to material and unpredictable ‘key man’ risk,” the document says, adding that the CEO’s “interests may be different from those of shareholders,” and there is a danger he “could engage in activities outside of GDH LP or could quit GDH LP in favor of other pursuits.”

No less notable, the report adds: “Mr. Novogratz’s public profile makes it more likely that GDH LP will attract material regulatory scrutiny, which would be costly and distracting regardless of whether GDH LP has engaged in any unlawful conduct.”

Image of Mike Novogratz via CoinDesk archives 

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Analyst: Bitcoin Isn’t ‘Hungover’ Anymore, But Don’t Expect A Rally Just Yet – newsBTC

As traders have begun to realize that the news regarding the financial status of Tether Limited (USDT’s issuer) and Bitfinex isn’t all too harrowing, Bitcoin (BTC) has recently stabilized. In fact, analysts have claimed that the crypto market’s lack of reaction to the seemingly bearish news shows strong fundamental strength, and may, in fact, be a precursor to a bull run.

Related Reading: Bitcoin Price Reaction to Tether Fiasco May Signal Strong Fundamental Strength

However, a number of chartists have recently taken to Twitter to note that contrary to popular belief, Bitcoin isn’t poised for a rally just yet.

Bitcoin Could See One. More. Drop.

Since BTC has become a liquid, tradable asset, it has followed short-term and long-term trends, most of which can be charted and extrapolated for price prediction purposes. One popular technical analyst, Brian “The Rational Investor” Beamish, argues that if Bitcoin follows its four-year cycle again, a move lower may soon be inbound.

As depicted below (chart courtesy of Beamish), Bitcoin’s price action in 2017 was evidently a “blow off top” and 2018’s was “the hangover,” two macro trends seen in the previous bubble. If Bitcoin continues to follow its trend, 2019 will see BTC rally tremendously, but not without another influx of capitulation first. Beamish suggests that a move to near December 2018’s levels will come in the coming months, potentially as soon as June.

And he isn’t alone in touting this belief. Through the medium of a Trading View post, Magic Poop Cannon, a somewhat ill-named analyst that predicted Bitcoin’s drop to $3,200, noted that BTC’s current chart structure is almost identical to that seen before the “second bottom” in 2015. (For those not versed in crypto market history: in 2015, BTC fell below $200 once, and then touched $200 again months later.)

Magic explains that Bitcoin’s current price action, the 50-week exponential moving average, 50- and 200-day moving averages, Fibonacci retracement levels, and Relative Strength Index (RSI) readings are all looking eerily similar in structure to that seen in mid-July 2015. And thus he wrote that if BTC tracks its historical trend, the golden cross will form (check), a trading range of $5,000 to $5,300 will hold until May 7th (check), and will collapse to $4,025 by the end of May. He explained further:

“Based on this comparison, from a technical standpoint, I have absolutely no reason to believe that we won’t retrace to at least the 0.618 [Fibonacci retracement], which is just above $4,000. People who think we are just going to skyrocket above that major resistance around $6,000 are delusional. It took months of testing for us to break down below that level. It will take months of testing for us to break out above it.”

Featured Image from Shutterstock

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L Train Slowdown Begins With Broken Countdown Clocks, Hour-Long Waits – Gothamist

The L train slowdown stumbled out of the gate on Friday night, kicking off drastic reductions in nights and weekend service with a performance that left many riders confused, frustrated and convinced the next 15-18 months will be more painful than previously thought.

The problems started at 9:30 p.m., just half an hour before L service was set to ramp down to planned 20 minute headways, with trains running just three times every hour. But as the gap between trains began to grow, the countdown clocks across the L train corridor sprung forward, showing 41 minutes waits until the next 8th-Avenue bound train arrived.

“Day one, and we’re already behind schedule. Real ominous,” remarked Williamsburg resident David Dimicelli as he gaped at the Bedford Avenue display screen. “I was expecting it to be pretty horrible, but…” The 33-year-old supply chain manager trailed off, then turned to his partner and reminded her it wasn’t too late to move out of the neighborhood for good.

An L train did eventually come about 30 minutes later, but the MTA was soon forced to take their countdown clocks offline, leaving riders in the dark about the train’s schedule until close to midnight. And even as the subway’s official Twitter account assured customers they could find real time service information on the MTA’s app, that too was on the fritz. As of noon on Saturday, the app still wasn’t showing 8th Avenue-bound L train service.

For many of the city’s regular L riders—a group that numbers 400,000 on a normal day—the reality underground was a far cry from the governor’s description of “service that would still work.” In Union Square, crowds were penned in along barricades on the mezzanine level, in some cases waiting to board an open train that wouldn’t arrive for close to an hour. Transit workers, stationed across the system in large numbers, practically begged customers to make use of the increased service on the M, G, and 7 lines, or the free transfers on the M14A/D and Williamsburg Link buses.

Those who did stay encountered extended waits not only inside stations, but on unmoving trains as well. The dwell times seemed especially bad at Union Square, where the MTA’s interlocking system means that Brooklyn-bound service must wait for a passing train to arrive before switching over to the shared track, in order to avoid the construction area between 3rd Avenue and Bedford.

“It’s worse than I thought,” said Alfredo Fernando, a dish-washer at a restaurant near Union Square. He typically leaves work at 11 p.m. to commute home to the Graham Avenue stop, he said, and hadn’t seriously considered using other alternatives until now. “This will be a total disaster for me.”

Been 27 minutes since last train left. Group station manager (Shan) going car to car telling people it’ll be another 5-10 minutes. Upstairs, a line of people waiting for next train pic.twitter.com/iSnikL4wuo

— Jake Offenhartz (@jangelooff) April 27, 2019

The L train’s ubiquitous showtime dancers were bummed out by the service reductions too. “This is really messing up the flow for us,” said Danny “DocSmooth” Cruz, a Bronx resident. Realizing that he’d probably have to start performing on a new line, he lamented taking the L for granted for so long. “This is the train right here. This is where it’s really at.’

Several riders did note that they were impressed by the MTA’s efforts at human communication. In addition to the hefty police presence, hundreds of transit workers—their orange vests affixed with bright pink “Ask me about the L project” buttons—were spread out across stations passing out literature and doing their best to answer questions. Among them was NYC Transit President Andy Byford, who spent much of his night pacing the platform asking New Yorkers where they were going and if they knew about the alternative service options.

A handful of workers also reiterated their own concerns about the safety of the revised L train project, which some fear could expose employees and riders to carcinogenic silica dust. “It’s going to get dusty down here,” predicted one MTA employee from behind a face mask. Asked if he was concerned about the air quality during the slowdown, he replied: “I wouldn’t be wearing a mask if I wasn’t.”

For their part, the MTA has called the fears about dust kicked up by construction on the damaged bench wall “outrageous and false.” The agency has also promised to make the results of their air quality monitoring available to the public, though it’s not clear when or where that information will be posted.

New Yorkers working together. With no countdown clock, they’re asking each other how long they’ve been waiting for the L train to figure out when the last one came. MTA worker suggesting they bail for the free shuttle bus. @NY1 pic.twitter.com/9BfKkAa28m

— Van Tieu (@Van_Tieu) April 27, 2019

Still, some riders said that the reduced service was an improvement from the previous plan, which would’ve shuttered the tunnel entirely for 15 months. Kristi Maroutas, a 30-year-old sales executive who moved to Williamsburg last month from Southold, Long Island, said she didn’t understand why people were freaking out: “If you’re really in a huge hurry just take an Uber. We’re just happy it’s open at all.”

One of the looming fears about the slowdown, according to transit advocates, is that L train riders will defect to ride-share companies en masse, creating congestion that snarls bus service and forces even more people give up on public transit. At least half a dozen riders told Gothamist on Friday night that they’d likely start taking car services between Manhattan and Brooklyn far more frequently.

As crowds around Union Square began to drop off around midnight, Byford told Gothamist he was proud of how the MTA had handled the first night of the slowdown, even if there were a few “learning points” along the way.

“The whole point is to continuously improve,” he added. “While Friday is intense for a short period of time, [on Saturday] we’ll be busy all day. I think tomorrow will be the bigger test.”

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