Mike Novogratz’s Crypto Merchant Bank Raising $250 Million Credit Fund
Galaxy Digital, a merchant crypto bank owned by Bitcoin bull Mike Novogratz is raising $250 million credit fund for crypto firms that want to borrow USD against cryptocurrency collateral. Tom Lee, the co-founder of Fundstrat Global Advisors has defended his earlier prediction that Bitcoin’s price would reach $25,000.
Huobi DM introduces contract trading for Litecoin (LTC)
Huobi, one of the largest crypto firms in the world announced that with effect from Jan. 25, users of Huobi Derivative Market (DM) can trade Litecoin (LTC) on the crypto asset contract service. The firm is planning to add Ripple’s XRP on its list before the end of the year.
Huobi Global of Livio Weng said “Litecoin is one of the biggest of the altcoins on the market today and we’ve seen quite a bit of demand for it by our users. We’ll be adding more coin types to the platform as 2019 progresses, with Ripple next on our list.”
The inclusion of LTC on the platform gives traders the opportunity to take both long and short positions on the digital asset, allowing for arbitrage, speculation, and hedging.
The price of LTC has spiked from less than $2 in 2013 to more than $360 in December 2017. “Given the huge changes in price Litecoin and other digital assets regularly experience, Huobi DM can be a powerful tool in managing risk and uncertainty,” said Weng.
The Huobi DM platform offers weekly, bi-weekly, and quarterly cryptocurrency contracts for several digital assets that include EOS, BTC, and ETH.
Mike Novogratz’s Galaxy Digital raising $250 million credit fund to lend fiat currency to crypto firms
Galaxy Digital, a crypto merchant bank owned by Bitcoin king and former Goldman Sachs partner Mike Novogratz is raising $250 million credit fund to lend USD to crypto companies in need of money. The borrowers – crypto firms – will only get the loan by using assets such as cryptocurrencies, properties, and Bitcoin mining equipment as collateral.
People familiar with the matter said the merchant bank is looking forward to closing the first round of funding in March, reported the Business Insider on Jan. 25.
The crypto bank is already in the lending business but is doing so from its balance sheet. Galaxy Digital has previously backed crypto lending startups through its venture arm Galaxy Digital Ventures. The subsidiary led a $52.5 million funding round for New York-based BlockFi.
The crypto merchant bank is planning to launch its own fund because the demand from borrowers is on the rise. The new fund will be run out the firm’s asset management arm.
BlockFi startup launched its lending platform in 2018 and has seen its revenue grow ten times since June. The firm is even considering offering more products this year.
The demand for borrowing and using cryptocurrencies as collateral stems from the bear market of last year that saw many firms and crypto players such as miners struggling to cope with expenses. Miners rely on high Bitcoin prices to make profits but last year was a difficult period as digital asset prices were in freefall.
Some people have argued that volatility of the young crypto market tends to hurt those who take out loans.
Aave CEO Stani Kulechov said, “The volatility of the cryptocurrency market represents a challenge when using these assets as collateral for loans. Cryptocurrency lending platforms need to make sure the value of the loan doesn’t surpass the value of the collateralized assets, causing borrowers to default, leaving them in a bind.”
Japanese SBI Holding leads a $15 million investment round in crypto wallet BRD
SBI Crypto Investment, a subsidiary of Japanese financial services company SBI Holdings has poured $15 million into San Francisco-based cryptocurrency wallet startup BRD. The crypto firm said it will use the funding to grow its product and engineering teams and for expansion in Japan and Asia as a whole.
The latest round of funding brings the company’s total funding to $55 million.
In a statement, BRD co-founder and CEO Adam Traidman said, “SBI Group’s investment in BRD allows us to firmly cement ourselves in the Asian market.”
“It shows incredible support for the foundation that we have built in North America and reinforces our proven ability to scale the success we have achieved in the past 4 years. The new investment will ensure our long-term global growth, and we are incredibly excited about collaborating with SBI as a strategic investor and business partner to make that happen,” added Traidman.
It is still a surprise that cryptocurrency firms are still raising funds despite the market downturn and the persistent calls that the Bitcoin bubble has burst.
“That’s what all got lost in 2018 as the fast-money, traders, and speculators came piling into the crypto space,” said Spencer Chen, the company’s vice president of global marketing.
BRD claims that its user base doubled in 2018 and ended the year with 1.8 million users globally. The company also says that it is storing an equivalent of $6 billion in BTC and ETH.
Fundstrat founder Tom Lee thinks it is possible for Bitcoin to reach $25,000
Tom Lee, the co-founder of Fundstrat Global Advisors appeared on Fox News on Jan. 25 and discussed traditional markets as well as cryptocurrencies. Tom Lee’s prediction that the price of Bitcoin would reach $25,000 by the end of last year was brought into question.
Asked if he still believes that Bitcoin would one day reach $25,000, Lee gave a big “Yes.”
“It’s a huge disappointment. It neither came in terms of price or by calendar,” said Lee as he addressed his failed prediction.
Lee said the prices of 2018 do not mirror the market. He stated last year was an adjustment period that came about as a result of many failed projects that left investors at a loss.
“We thought Bitcoin would survive that. It didn’t. It got sold off with the rest of the market,” said Lee.
Last year, investors, traders, and analysts predicted that the market would see huge gains. The market proved the majority of them wrong as prices of digital assets fell down throughout the year. The crypto market is still trying to recover from the effects of last year but it remains to be seen when and how this will happen.
He pointed out that there is still an appetite for cryptocurrencies. “There is an interest in digital currency, digital asset, store of value that’s not traditional money,” he said.