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Mike Novogratz Unveils Plan for Cryptocurrency 'Merchant Bank'

Billionaire and ex-fund manager Mike Novogratz has unveiled the launch of a cryptocurrency “merchant bank.”

Novogratz, a former chief investment officer for Fortress, is behind Galaxy Digital, which according to a Jan. 9 announcements will constitute a “full service, digital assets merchant bank.” Described by some as a kind of “Goldman Sachs for crypto,” Bloomberg reports that the plan is to get the company listed on the TSX Venture Exchange and raise upwards of $200 million.

The venture will not offer any services to U.S. residents, according to the release.

While Novogratz’s group has a plan outlined for the future bank’s operations, as well as a partial list of Galaxy Digital’s management, the press release noted that the proposal was contingent on being accepted by the Canadian TSX Venture Exchange, all parties completing their due diligence inspecting company assets, and the formation of a board of directors independent of both Galaxy Digital and Bradmer.

The groups aim to finish their respective due diligence work before the end of the first quarter in 2018, according to statements.

Galaxy Digital was previously set to launch a cryptocurrency hedge fund before Novogratz moved to scuttle the launch in late December. At the time, he cited the challenges involved in managing clients’ cryptocurrencies in addition to his own portfolio and other conflicts of interest.

He also cited market conditions – bitcoin had fallen nearly 50 percent in the previous few days – according to a previous Bloomberg report.

Novogratz image via CoinDesk archives

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Billionaire Mike Novogratz: Bitcoin's Price Will Reach $10k in Less Than a Year

Ex-fund manager Michael Novogratz has said in an interview that he believes the value of a bitcoin will reach $10,000 in six to 10 months.

Putting his belief into practise, Novogratz, a former principal at investment firm Fortress and an ex-partner at Goldman Sachs, said he is leaving retirement to start a $500 million fund for cryptocurrencies, token sales and related startups.

Named the Galaxy Digital Asset fund, Novogratz indicated he has committed $150 million of his own money to the venture, and aims to raise the rest by January, CNBC reports. The remaining funds will be raised by wealthy individuals and other hedge fund managers.

Rather than focus on a narrow range of cryptocurrencies, the billionaire intends to invest indiscriminately across the industry, or “play the whole ecosystem,” he explained.

In an interview with CNBC’s Fast Money, Novogratz called the emerging landscape a “revolution,” stating:

“I never thought I’d come out of retirement but the space is so exciting right now I decided to build a business, hire a whole bunch of smart guys, and we’re gonna to raise a fund … and hopefully take advantage of what I see as a revolution, actually. A decentralised revolution.”

As a store of value, Novogratz likened bitcoin to digital gold, and said the technology is beginning to make “more and more sense” as we move increasingly into the digital.

Novogratz continued to say that, while bitcoin is a bubble, the mania is justified, because it is a technological advancement that promises to fundamentally alter our lives. Bitcoin is set to become “the biggest bubble of our time,” he added, and could reach $10,000 very soon due to fast-building interest.

“I can hear the herd coming” Novogratz said.

Michael Novogratz image via CoinDesk archives

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.