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Galaxy Digital Holdings, the crypto-bank business created by former hedge fund manager Michael Novogratz, lost $ 97 million in the fourth quarter, according to financial information released Monday.
The net loss increased from $ 76.7 million in the third quarter to about $ 100,000 a year ago, according to the document filed with Canadian securities regulators. (Last February, New York-based Galaxy bought a Canadian listed company as part of a reverse takeover.)
For the first time in 2018, the company lost $ 272.7 million.
Most of the red ink in 2018, or $ 101.4 million, came from the sale of digital assets at a loss.
Galaxy also recorded a $ 75.5 million paper loss on held paper held down, $ 8.5 million in unrealized losses on business investments and $ 88.4 million in exploitation charges.
What pieces have lost
At the end of 2018, Galaxy held 9,724 bitcoins ($ 36.4 million), 92,545 Aether ($ 12.3 million), 2.4 million EUR ($ 6 million) and 60,227 Monero ($ 2.8 million). The company has increased its investments in bitcoins and ether since the beginning of the year, when it held 5,902 BTC and 57,000 ETH.
Galaxy also held significant amounts of wax chips ($ 50.2 million) and BlockV blocks ($ 17.4 million), which had disappeared from the company's largest investments at the end of the year.
According to the report, Galaxy lost money by selling bitcoins ($ 70.3 million) and ether ($ 64.4 million), partially offset by $ 54.3 million earned by selling some cryptocurrency uncovered (it is not specified which ones).
Bitcoins were the main source of losses in early 2018, while the ether caused the most damage during the rest of the year.
It is worth noting that Galaxy lost up to $ 47 million on the Wax token depreciation, an asset created to fuel a virtual goods trading platform, such as video game objects.
Several other altcoins also lost value before Galaxy sold them profitably in 2018: Kin (losses of $ 10.9 million), BlockV ($ 17.2 million) and Aion ($ 8.6 million). dollars). Some $ 5 million was also lost on EOS.
Protocols, mines and OIC
A number of companies and investment funds in Galaxy's portfolio have lost value.
For example, the amortization of Pantera ICO Fund LP shares resulted in a loss of $ 14.1 million (Galaxy currently invests $ 17.4 million in the fund). The company also discounted $ 11.3 million on its shares in Canadian company Hut 8 Mining Corp and $ 11.1 million in Xapo cryptographic holding company.
At the end of 2018, Galaxy held $ 41.9 million in shares of Block.One, the creator of EOS, as well as an additional $ 5 million in the Galaxy EOS VC fund focused on developing the EOS ecosystem. IO.
At the same time, Ripple Labs, a start-up specializing in payments, received $ 23.8 million, including "an indirect investment through a special vehicle," the report says.
Galaxy has also invested $ 26 million in mining companies, including Hut 8 Mining and Bitfury; $ 7.5 million in depository and multi-signature portfolios provider, BitGo; and $ 5 million in Bakkt, the futures exchange for bitcoins still to be launched by the parent company of the New York Stock Exchange, ICE.
Other investments include Silvergate Capital Corporation, the parent company of Silvergate Bank, a user-friendly crypto; creating AlphaPoint and Templum tokens investment vehicles Cryptology Asset and Pantera Venture Fund; and Mercantile Global Holdings, a Puerto Rico-based entity that operates the recently created San Juan Mercantile Exchange. The company also granted $ 3.8 million in loans to the BlockFi crypto loan platform.
Risk factors
Regarding potential risks for Galaxy, the report pays particular attention to the concentration of power in the hands of CEO and lead player Mike Novogratz, who holds more than 71% of Galaxy's capital.
Among regulatory and market risks, Galaxy is "heavily dependent on Michael Novogratz, exposing shareholders to a significant and unpredictable risk to" the key man, "says the paper, stating that" the interests the CEO may be different from those of the shareholders ". is a danger, it "could engage in activities outside of GDH LP or could leave GDH LP for the benefit of other activities".
No less notable, the report adds: "Mr. Thanks to Novogratz's public profile, it is more likely that GDH LP will trigger an in-depth regulatory review, which would be costly and distracting, whether or not the LP GDH engaged in unlawful conduct. "
Image of Mike Novogratz via CoinDesk Archive
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