Crypto merchant bank Galaxy Digital took a $134 million hit in the first quarter as bitcoin lost half its value and other cryptocurrencies struggled to break out of a bear market.
In its first-ever financial disclosure released this week, the New York-based firm reported a net loss of $103.3 million on trading, with $13.5 million on digital assets and another $85.5 million of unrealized losses on those assets. Former Goldman Sachs macro trader Michael Novogratz launched the company in November, a month before bitcoin hit its high near $20,000.
"I am very proud of the progress that we have made since the beginning of the year," Galaxy CEO Novogratz said in a statement, which was published on a Canadian financial regulator's website. Despite the loss, Novogratz, who was formerly chief investment officer of Fortress Investment Group's macro fund, said he still has "complete confidence" in the team's ability to drive growth and that Galaxy is "strategically positioned to help further institutionalize the digital assets and blockchain industry."
As part of that growth, Novogratz outlined plans to list the merchant bank on Canada's TSX Venture Exchange. In order to list, Galaxy Digital will buy Canadian crypto startup Coin Capital, then merge through a reverse takeover with Canadian shell company Bradmer Pharmaceuticals, which it plans to rename. The company will have more than 70 employees as a result.