Novogratz’s Galaxy Digital Raising $250M USD For Crypto Credit Fund

Investing, News | January 25, 2019 By:

Galaxy Digital, Mike Novogratz’s crypto-focused merchant bank, is reportedly raising at least $250 million to offer loans to struggling crypto firms.

Citing people familiar with the matter, US-based news site Business Insider reported that Galaxy Digital is planning to create a crypto credit fund to offer loans to crypto companies in return for collateral, including digital assets, properties and mining hardwares. According to the report, the first round of fundraising for the company’s crypto credit fund is expected to close in March.

While the crypto merchant bank is already lending to crypto firms using its own balance sheet, the sources said Galaxy Digital decided to create a dedicated credit fund after seeing strong demand for loans from developers and cryptocurrency miners that are struggling to survive the ongoing “crypto winter.”

With crypto prices tumbling from their all-time highs, downsizing has become a common occurrence in the crypto space. Last month, crypto mining giant Bitmain and crypto exchange operator Huobi Group have confirmed plans to lay off staff to cope with crypto winter. On the other hand, crypto-lenders, such as Salt Lending and BlockFi, have continued to grow due to the demand the current bear market generates for their services.

In November, Novogratz said that 2018 has been challenging for his company, saying it “sucks to build a business in a bear market.” However, he still believes that financial institutions will transition from investing in cryptocurrency funds to investing in cryptocurrencies proper in the first quarter of 2019.