galaxy digital - Pwim.Net

Galaxy Digital Capital Management Launches Bitcoin Funds While Making Bakkt and Fidelity Custodians

Galaxy Digital Capital Management LP, an affiliate of Galaxy Digital Holdings Ltd, issued two Bitcoin funds with Bakkt and Fidelity Digital Assets as custodians for the funds, while Bloomberg L.P will be the pricing agent. These funds, the Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund, offer low-fee to both institutional and accredited investors. It also provides standard tax documentation, client service support, and bitcoin exposure, which is backed by vetted services providers.

According to the CEO and Founder of Galaxy Digital, Mike Novogratz: “Galaxy has continued to have high hope and assurance in Bitcoin and has made remarkable strides in helping to bring a more institutionalized footprint to the digital asset ecosystem.” He also went ahead to emphasis the importance of this development in achieving the ultimate goal.

The report held that the Head of Asset Management at Galaxy Digital, Steve Kurz, will look after the funds in tandem with Portfolio Manager Paul Cappelli. While the Galaxy Bitcoin Fund requires a minimum investment of $25,000 with quarterly liquidity, the Galaxy Institutional Bitcoin Fund requires a higher minimum investment with weekly liquidity.

Steve Kurz, Head of Asset Management at Galaxy Digital said:

“The Galaxy Bitcoin Funds help accredited investors mitigate the complexities and risks of managing direct bitcoin investments. The funds provide investors bitcoin exposure with institutionally secure third-party custody, best-in-class service providers, and Galaxy’s platform support.”

Image via Shutterstock

Bakkt And Galaxy Digital Announce New Bitcoin Service Aimed at Institutional Investors

Regulated Bitcoin futures provider Bakkt and Galaxy Digital’s trading arm seek to cater to the rising institutional demand for Bitcoin. The two firms have just developed a new service targeting institutional investors looking to purchase and store Bitcoin.

The two New-York based crypto companies announced that they partnered to create a new service in which they take care of the entire process including onboarding, trade execution, and storage of digital assets for institutional investors. They call the new service as a “white glove” custody and trading solution.

Bitcoin bandwagoning

Galaxy Digital will offer all the trading functionalities and services, thus leveraging its existing plugins to thirty different exchange venues. On the other hand, Bakkt will provide custody services through its Bitcoin institutional custody (Bakkt warehouse) that it currently utilizes to enable clients to invest in Bitcoin futures.

Time Plakas, head of sales at Galaxy Trading, said: “We designed this partnership to serve the uptick in demand our two firms have received from traditional asset managers seeking access to physical Bitcoin.”

According to a recent survey conducted by Fidelity among 800 institutional investors, almost 80% of them are interested in investing in digital assets. In the previous month, the billionaire investors and hedge fund manager Paul Tudor also made a compelling case for buying Bitcoin, stating that it can act as a hedge against inflation. Therefore, it is not surprising for Bakkt and Galaxy Digital to have decided to work together to take advantage of the high demand.

A recent rise in the Bitcoin derivative market also indicates that more institutional investors are entering the space. The Fidelity survey shows that the percentage of US investors with exposure to crypto futures rose from 9% in 2019 to 22% in 2020.

Bakkt and Galaxy Digital are jointly seeking to provide this new service to institutions like traditional finance asset managers and hedge funds. Bakkt has to date onboarded over 70 firms for its custody business while Galaxy Digital’s trading unit experienced over $1 billion of volume in the first quarter of 2020.

Crypto-Spring in bloom

The recent increase in Bitcoin price is evidence of cryptocurrency revival. The demand is fueled by institutions going for the leading cryptocurrency. The mass psychology of cryptocurrency investing is real. Institutional investors have seen the increase of new tools, use-cases, and innovations that have forced them to change their minds about cryptocurrency. They have realized how cryptos such as Bitcoin could be an important hedge against financial crisis.

Institutions are increasingly embracing technology and considering digital assets as an innovative technology play. They seek to invest in cryptocurrencies due to their low correlation to other assets. It is a new era that marks the acceptance of cryptocurrency as a full-fledged asset class, hedge against economic uncertainty, and form of sound money.

Bitcoin Price Bull Run Will Hit All Time High in 2020, Predicts Billionaire Bitcoin Investor

Bitcoin’s price is heading to $20,000 by the end of 2020 according to billionaire cryptocurrency investor Michael Novagratz, CEO, of Galaxy Digital.

The Bitcoin price appears to finally be making its bull run after months of inaction, and briefly reached a new price high for 2020 when it peaked over $11,400 on Monday before a slight correction.

Michael Novogratz, the former hedge fund billionaire and now cryptocurrency investor and advocate thinks that the Bitcoin price bull run is just warming up. The Galaxy Digital CEO believes the Bitcoin price will hit $20,000 by the end of 2020 due to rising investment from the retail sector and fueled by the liquidity pump of the Federal Reserve into the global economy.

The Liquidity Story

On Tuesday, July 28, billionaire investor Michael Novogratz told CNBC that his investments into gold and Bitcoin have started to pay off in recent weeks, and he asserted that the price of both assets is set to continue rising—predicting the Bitcoin price will return to its all-time high of $20,000.

Novogratz told CNBC, “The liquidity story isn’t going away. We’re going to get a big stimulus…it doesn’t look like the Federal Reserve is going to raise rates.”

The Bitcoin price had been stagnant, hovering around the low $9000s in value prior to the bullish surge on July 26, and had received a lot of criticism from big players in the crypto industry.

As the value of the USD has been depreciating with the mass printing of stimulus checks deployed by the US government for pandemic repercussions relief and with gold finally responding with a price rally, Bitcoin (BTC) appears to have finally gained some bullish traction on the crypto market.

With the announcement on Monday of the second round of stimulus payments on the way in the United States—Novogratz believes that a catalyst for a further Bitcoin price bull run as well as a gold price bull run is upon us.

Depreciating Dollar and Safe Haven Assets

The coronavirus pandemic lockdown has created a huge financial chasm in the markets, one that the US Federal Reserve has tried to fill by pumping liquidity back through the economy via stimulus packages for small businesses and citizens. The US government’s first stimulus package put $2 trillion dollars into play, sending out $1,200 dollars to each citizen.

The second round of stimulus will be another $1 trillion dollars as well as individual payments to each US adult citizen of $1,200.

With the USD being printed in bulk by the US government in the goal of delivering a second round of stimulus packages to the population, many investors have been moving wealth to cryptocurrencies like Bitcoin as a safe haven hedge.

In fact, it was even reported by crypto exchange Coinbase that many Americans had used their first stimulus check of $1,200 towards investments in Bitcoin. Crypto advocates tout Bitcoins and altcoins as a means to protect their wealth from the expected inflation that will follow.

Gold has also enjoyed a resurgence in popularity and has always been regarded as the traditional store of value. The gold price also rose above $1900 and has held up close to $2000 per ounce—a trend that Novogratz also sees continuing.

With the announcement of the second stimulus, Novogratz observed, “Yesterday, you saw a lot of money shift back over to gold and Bitcoin,” he added that there is also, “a lot of retail interest in Bitcoin.”

Novogratz stated that the mass of retail traders switching from stocks to Bitcoin due to the announcement of a fresh government stimulus indicated to him that the Bitcoin price could reach $14,000 in the next three months. By the year’s end, the Galaxy Digital CEO predicted the Bitcoin price will return to its all-time high of $20,000 per coin.

Novogratz also asserted that he has observed institutional investors moving value to Bitcoin but believed there is a bit of a learning curve for Wall Street investors when buying cryptocurrency instead of gold. He said, “Gold has been around for 3,000 years, it’s pretty easy to buy…there’s an adoption game in Bitcoin that you don’t have in gold.”

Winklevoss Twins Also Think BTC is a Good Hedge Investment

Novogratz’s Bitcoin price prediction has been shown support by other investors in the space.

The always influential Gemini CEO Tyler Winklevoss advocated in a recent public tweet that Bitcoin is the way to go, and should definitely be invested in. He explained that with the US Federal Reserve’s plan of mass printing money, the “stage for Bitcoin’s next bull run is set.”

The coin exchange CEO thinks that with the current economic turmoil, investors are going to be looking at BTC as a more interesting alternative investment solution, as opposed to mainstream markets.

Galaxy Digital CEO Mike Novogratz Says Launch of Digital Euro Will Drive Bitcoin Adoption

Galaxy Digital CEO Mike Novogratz has responded to a recent announcement made by the European Central Bank president Christine Lagarde that the European Central Bank (ECB) will issue its own digital currency. Novogratz does not believe that Bitcoin would be threatened by the digital euro. He instead says that the ECB issuing its own digital currency could help drive the adoption of Bitcoin and other cryptocurrencies.

Why CBDCs Are Good for Bitcoin

In her speech on September 21, Christine Lagarde talked about the topic of issuing a Central Bank Digital Currency (CBDC). The European Central Bank is currently examining the idea of issuing a digital currency. The central bank is also carefully assessing key challenges associated with the digital currency.

Lagarde said:

“We are also exploring the benefits, risks, and operational challenges of introducing a digital euro. A digital euro could be a complement to, not a substitute for, cash; it could provide an alternative to private digital currencies and ensure that sovereign money remains at the core of European payment systems.”

She described the digital euro as just a complement to cash, but not its ultimate replacement. The digital euro would ensure that a widely used cryptocurrency like Bitcoin does not replace sovereign money.

However, the exact launch of the digital currency is still unknown as there is very little available information about the design of the CBDC.

Novogratz is a well-respected and successful macro hedge fund manager who understands both worlds of traditional finance and cryptocurrencies. So, he understands how the CBDC would impact Bitcoin.

Novogratz believes that the European Central Bank launching its own central-bank-issued digital currency will help the adoption of Bitcoin and other cryptocurrencies as well. Central banks love to print money. He says that if the same central banks keep printing their fiat currencies like it is a toilet paper, then Central Bank Digital Currencies will deprecate, but Bitcoin won’t.

Novogratz believes that the ECB will go back to its old ways with the digital euro by printing an unlimited amount of money.

Novogratz said that central banks that develop their fiat currency-pegged digital currencies might be providing more power to Bitcoin by paving the way for institutional interest. He said that Bitcoin and other cryptocurrencies could eventually benefit from the same infrastructure, which is used by the widespread adoption of CBDC. In other words, central banks would build infrastructure used to safely transact and store CBDCs. But that same infrastructure could be used for cryptocurrencies such as Bitcoin.

Bitcoin as A Hedge Against Inflation

Around the globe, central banks are flirting with digital currency. Central Bank Digital Currencies are going to be a trending topic as plans for CBDCs are underway in more than 45 countries, including China, Uruguay, Turkey, France, and Sweden. But are CBDCs a threat to or good for Bitcoin? Various experts have indicated that CBDCs would pave the way for continued institutional and retail interest in Bitcoin and other cryptocurrencies.

If billions of people will have digital wallets and have a new familiarity and understanding with digital money, then accessing a global, non-sovereign currency like Bitcoin becomes much faster and shorter. If financial institutions have to develop infrastructure and tools to safely transact and store CBDC, that same infrastructure could potentially be used for Bitcoin.

CBDC is still a government-controlled fiat currency, which is the same fiat currency being used today. It is still prone to inflation and selective money printing. To hedge against the decreasing purchasing power of fiat and monetary inflation, people would still consider buying Bitcoin just like what billionaire Paul Tudor Jones has done.

Public Companies Now Hold Almost $7 Billion Worth Of Bitcoin

At the time of writing, there is almost $7 billion of Bitcoin currently held by 13 publicly listed companies. Companies including Grayscale, Galaxy Digital, Microstrategy, and Square, are among the largest holders of cryptocurrency, as businesses react to a change in sentiment towards Bitcoin and other cryptocurrencies.

Several high profile influential figures that have previously cast doubt upon cryptocurrency are now also changing their tune, as blockchain technology becomes an undeniable force for innovation.

Gold has historically been the go-to as a hedge against economic uncertainty, but the rise in adoption of Bitcoin has grown exponentially throughout the last decade, drawing the attention of some of the biggest names in tech.

Jack Dorsey, CEO of Twitter and payments processing service Square, publicly tweeted that Square had invested $50 million of the company’s holdings into Bitcoin, along with details of how other publicly traded companies could do it too.

Grayscale has been stacking huge amounts of Bitcoin on behalf of clients over the past year, with a total of 449,596 BTC under management in its BTC trust.

Software giant Microstrategy currently holds 38,250 BTC, the second-largest holding of cryptocurrency than any publicly traded investor, other than Grayscale. The holdings also mean that an array of shareholders are also indirectly exposed to cryptocurrency as Bitcoin makes the company’s balance sheet.

Interestingly, the government of Norway holds a 2% stake in Microstrategy, meaning that all Norwegians are now also exposed to Bitcoin indirectly.

Investments by the publicly traded companies on this list are proving to be a catalyst for the demand of Bitcoin on an enterprise level, and we can expect to see this list keep growing.

Billionaire Investor Mike Novogratz Buys Bitcoin at $56,500

Billionaire investor Mike Novogratz has maintained his bullish title, reaffirming that he has bought even more Bitcoin (BTC) at an average price of $56,500 each.

Novogratz is credited to be a huge Bitcoin pioneer, but he has not publicly revealed any new Bitcoin purchases since the beginning of the ongoing bull run. The update shared via his Twitter handle however has quelled any doubts that the billionaire is still in the game.

“I bought more BTC at 56,500. Just in case anyone was wondering if I’m still bullish,” Novogratz tweeted.

As is generally known, the older Bitcoin investors are more likely to HODL digital currencies in their portfolio while the major sell-offs continually seen today are the activities of new BTC holders. Novogratz’s latest claim however is a testament that some old investors are still stacking up more of Bitcoin, the asset that has attained wide acclaim as the best hedge against inflation.

Promoting Bitcoin ETFs in Canada

The role of Mike Novogratz to Bitcoin and the entire cryptocurrency ecosystem does not just revolve around personal BTC purchases and the ensuing impact, it also aims at driving the mainstream adoption of the premier digital currency through his firm Galaxy Digital Capital Management.

One of the ways is the launch of a Bitcoin Exchange Traded Fund (ETF) product through a working partnership with Canada-based CI Global Asset Management. The ETF product dubbed the CI Galaxy Bitcoin ETF will give corporate investors exposure to Bitcoin without directly owning the asset.

The United States Securities and Exchange Commission (SEC) has repeatedly rejected the applications for a Bitcoin ETF product in the US and Novogratz’s role in launching one of the first American-based ETFs may benefit one of the world’s largest economies as cryptocurrencies continue to rise in demand and enter mainstream adoption.

Morgan Stanley Becomes First US Bank to Offer Bitcoin Funds to Its Clients

United States banking giant, Morgan Stanley has made history as the first American bank to offer its clients access to Bitcoin (BTC) fund investments.

Per a CNBC report citing people close to the matter, the investment banking giant succumbed to the request of its clients to provide the service, and the provision will let eligible clients have access to three Bitcoin funds, including two from Galaxy Digital, a crypto firm founded by Mike Novogratz, and one from a joint effort from asset manager FS Investments and bitcoin company NYDIG.

While the offer from Morgan Stanley is a good step toward helping drive the corporate adoption of the emerging asset class, there is a condition attached to the qualification. Individual clients of the bank who wants to participate or have access to the fund must have at least $2 million in assets with the bank, while investment outfits must have a minimum asset of $5 million. Both classes of investors must have been held such funds with the bank for at least 6 months.

Investment in cryptocurrencies is still largely unregulated, and per the associated risk involved, Morgan Stanley is limiting the investable amount to the funds to 2.5% of the eligible clients’ total net worth.

A New Room For Institutional Investors To Embrace BTC

Morgan Stanley’s offer to allow its clients to have direct access to Bitcoin investment funds is a major avenue to let institutional investors get aboard the fast-moving train of cryptocurrency investments.

American cryptocurrency-based companies and investors have been clamouring for a Bitcoin Exchange-Traded Fund (ETF) to be approved by the Securities and Exchange Commission (SEC), an investment alternative that lets people have exposure to Bitcoin and other coins without directly owning the assets. While the SEC has had a reservation about this, the Morgan Stanley option will serve as a succour in the interim to let corporate investors get on board BTC train.

Goldman Sachs Starts Trading Bitcoin Futures, Taps Galaxy Digital as Liquidity Provider

Goldman Sachs has begun trading CME Group’s Bitcoin futures based on partnership with Galaxy Digital Digital as the selected counterparty entity.

The trade is the first time when Goldman has used a digital asset company as a counterparty since the investment bank introduced its crypto desk last month.

Galaxy Digital Digital will serve as Goldman’s “liquidity provider” – a digital asset firm that provides quotes for buy and sells orders – on CME Group Bitcoin futures. Last month, Goldman presented a memo saying that it would sign on new liquidity providers to help the investment bank expand its Bitcoin and other digital assets offerings.

“Our goal is to equip our clients with best-execution pricing and secure access to the assets they want to trade. In 2021, this now includes crypto, and we are pleased to have found a partner with a broad range of liquidity venues and differentiated derivatives capabilities spanning the cryptocurrency ecosystem.” Max Minton, head of digital assets for Goldman’s Asia-Pacific region, said.

“We are proud to be a strategic partner of Goldman and look forward to working with Max and his team to meet the increasing demand from institutions and pave the way to broader adoption of cryptocurrencies as an asset class,” Damien Vanderwilt, Galaxy’s Co-President and Head of Global Markets, said in a statement.

Vanderwilt stated that Goldman is leaning on Galaxy Digital to access the crypto world because the highly regulated banking industry can’t handle Bitcoin directly.

But nothing prevents banks from dealing in financial wagers tied to the price of underlying coins, and that is where Wall Street is beginning its crypto journey, Vanderwilt said.

Galaxy Digital anchors itself as a bridge for financial firms and crypto avenues. The firm, whose shares are listed on the Toronto Stock Exchange, will likely offer shares in the US this year.

Banks’ Appetite for Crypto

In recent months, Goldman Sachs has been making efforts to expand its crypto services.

Last week, Goldman announced that it plans to expand its client-facing crypto offerings with Ether options and futures within the next few months.

In March, the investment bank relaunched its crypto trading desk and announced that it would start offering Bitcoin futures and non-derivable forwards to clients. The bank had initially launched a crypto desk in 2017 but stopped such trading in 2018 due to regulatory concerns. In March this year, the bank reintroduced its crypto offerings amid rising interest among institutional investors and its client base.

Goldman’s moves may influence Wall Street and beyond as banks increasingly face pressure from clients who want exposure to Bitcoin. By being the first major U.S bank to start trading cryptocurrency, Goldman is giving other banks the cover to start doing so as well.

As more banks allow clients, including sovereign wealth funds, family offices, pensions, and hedge funds, to trade Bitcoin, the breadth and depth of the market improves, which would lower Bitcoin’s famous volatility.

Mike Novogratz's Galaxy Digital Files with SEC to Launch Bitcoin Futures ETF

Galaxy Digital Holdings Ltd, an investment company, run by the former hedge fund manager and billionaire investor Mike Novogratz, is seeking regulatory approval to launch a Bitcoin futures Exchange-Traded Fund (ETF).

The firm filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday, August 17, after the regulator chairman, Gary Gensler, recently stated that the agency might be open to approving Bitcoin futures ETFs.

Galaxy Bitcoin Strategy ETF plans to start investing in Bitcoin futures contracts and not directly in actual Bitcoin.

Galaxy Digital applied for a Bitcoin Exchange-Traded Fund (ETF) backed by the actual underlying asset four months ago. But now, the firm is making another attempt to launch an investment fund tied to Bitcoin futures (the Galaxy Bitcoin strategy EFT). This new investment product does not directly invest in actual Bitcoin but instead seeks to provide capital appreciation mainly through active Bitcoin futures contracts.

Currently, the Chicago Mercantile Exchange (CME) is the only regulated trading platform providing such contracts. If the green light is on, the Galaxy Bitcoin Strategy EFT will be listed on the Nasdaq Exchange, the filing stated.

US Regulators Favour Bitcoin Futures Products

Galaxy Digital is the latest financial services firm to file for a Bitcoin futures ETF, which currently seems to be the most viable option to launch a regulated crypto investment vehicle in the United States.

The US SEC has yet to approve any ETF tied to actual Bitcoin because of legal concerns about fraud, market manipulation, and asset volatility. But earlier this month, SEC chair Gary Gensler hinted that the regulator would instead favour ETFs tied to Bitcoin futures.

Gensler’s comments brought a renewed hope as many firms, including giant investment Fidelity, ETF sponsor Wisdom Trust, investment management firm Invesco, ETF provider VanEck, Valkyrie Investment, Anthony Scaramucci’s SkyBridge Capital, the New York Digital Investment Group (NYDIG), and others recently moved to file for Bitcoin ETFs. However, the regulator has not shown any sign that such a product will be approved anytime soon.

Brazil, Europe, and Canada all have functioning Bitcoin funds in circulation and argue that repeatedly putting off approval carries its risks.

The absence of a Bitcoin ETF is causing problems in the US’s Bitcoin market. In connection to such a product, Grayscale’s Bitcoin Trust (GBTC) – an investment fund trust backed by Bitcoin – has been embraced by the majority of institutions demanding Bitcoin investment.

However, shares of the GBTC investments can’t be redeemed for their underlying coins. Such shares are now trading at negative premiums, lower than the value of the underlying Bitcoin per share. The GBTC fund is not allowed to redeem Bitcoin’s shares, so the market cannot organically fix the problem.

The approval of Bitcoin ETFs would allow investors to redeem shares at any time. And this would prevent Bitcoin shares from trading at negative premiums and help keep the shares matching the value of the underlying coins.

Image source: Wikipedia

Bloomberg and Galaxy Digital Floats Crypto Index for Decentralized Finance

The growing strides of Decentralized Finance (DeFi), a fast-growing offshoot of blockchain technology, has yet gained a boost as Bloomberg and Galaxy Digital joins forces to launch the Bloomberg Galaxy DeFi Index (ticker: DEFI).

Targets of the New Benchmark

The Bloomberg Galaxy DeFi Index is a benchmark designed to measure the performance of the largest decentralized finance (DeFi) protocols by market value that independently offer financial services. These protocols are governed by a uniquely designed smart contract and have no interference with a central financial intermediary, such as brokerages, exchanges, or banks.

The index fund is owned by Bloomberg, with co-branding with Galaxy Digital. The fund constituents are designed to take a minimum holding of 1% and a maximum of 40%. As of August 1, only Uniswap (UNI), the Automated Market Maker (AMM) powered decentralized exchange is the only constituent with 40% weighting.

The other constituents of the fund includes; AAVE (AAVE) 18.0%, Maker (MKR) 12.7%, Compound (COMP) 10.0%, Yearn.Finance (YFI) 5.4%, Synthetix (SNX) 5.0%, SushiSwap (SUSHI) 4.3%, 0x (ZXR) 2.8%, and UMA (UMA) 1.8%. Neither of these constituents is occupying a permanent position, the index will be reviewed month with possible additions or subtractions.

A New Tool to Monitor the Growth in DeFi

The world of DeFi has seen massive growth thus far this year. The total value locked by DeFi protocols grew from $20 billion as of December 2020 to $79.49 billion at the time of writing, according to DeFi Pulse. The Bloomberg Galaxy DeFi Index will further help keep track of this fast-growing market niche.

“The blockchain-based infrastructure behind DeFi is maturing at an accelerating rate, and clear examples of how this new technology can disrupt financial services are emerging in real-time. This partnership with Bloomberg and our DeFi Index Fund provides investors with data and tools that deliver calculated exposure to the future of financial services,” said Steve Kurz, Partner and Head of Asset Management at Galaxy Digital.