Back in September, Fortress Investment Group executive turned bitcoin cheerleader Mike Novogratz had a bold prediction to make: The worst was over for his beloved fake currency. Having considered the history of finance and the Galaxy Digital cryptocurrency index, and possibly consulting with the oracles and Satoshi Nakamoto himself, Novogratz declared that it was impossible for a bitcoin to fall any further. “Bitcoin has held $6,000,” he said. “It has established itself as a store of value.”
When Novogratz went out on that particularly rickety limb, he knew that his little crypto trading desk was coming to the end of a bad quarter. And it was a bad quarter:
Net realized and unrealized losses on digital assets at Galaxy Digital Holdings LP’s trading operation totaled about $41 million in the third quarter, bringing losses for the first nine months of the year to $136 million, according to company filings this week.
Early fall Mike probably would have said: That’s OK! Sure, maybe BTC won’t be worth $40K like I said it would be, but it’s still on track to get back into the five figures by the middle of 2019. It’s just a little dirty. It’s still good. It’s still good!
Unfortunately for Novogratz and Galaxy Digital, however, bitcoin can fall below $6,000, and the third quarter looks like a major success compared to the first half of the fourth.
The Bloomberg Galaxy Crypto Index, which was established by Galaxy Digital in partnership with Bloomberg LP, the parent of Bloomberg News, tumbled 11 percent in the third quarter as the market grappled with ongoing security and regulatory concerns and a dearth of institutional investment. It has since tumbled another 44 percent.
As for Galaxy Digital’s shares, they’re trading at a record low after sinking 55 percent this month.