Category Archives: Mike Novogratz

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Morgan Creek Warns of High Risk Exposure of Pension Funds

Morgan Creek Warns of High Risk Exposure of Pension Funds

Private pension funds may be in more trouble than has been purported, according to a post made by Co-founder and Partner at Morgan Creek Digital, Anthony Pompliano.

Referencing the Q4 2018 quarter-over-quarter (QoQ) of private pension fund assets, which recorded its second largest loss in close to seven decades, and the largest in a decade. A significant signal that all is not well with the private pension fund. Apparently, not only the private pension funds are taking a hit, even the Japan government’s Pension Investment Fund – the largest in the world – recorded a loss of USD 136 billion, about 9.1% in the same reference quarter. Self-proclaimed global macro analyst Otavio Tavi Costa’s remark on the level of risk exposure of retirement assets calls for puzzlement, as to why these funds are still hell-bent on patronizing the equities market when other options are available.

Private pension funds reported their second largest % loss since 1950s in Q4 of 2018!

Worst quarter since 2008.

One can only imagine the level of risk retirement assets are exposed to these days. pic.twitter.com/VGCW9aXpVx

— Otavio (Tavi) Costa (@TaviCosta) April 2, 2019

According to Pompliano, the disturbing fact that “one of the most conservative capital allocators in the world… almost lost a double-digit percentage of their assets in 90 days” despite their diversified portfolio in global equities and structured in such a way as to experience “uncommon levels of volatility”. He further emphasized his point, quoting his partner Mark Yusko:

“Humans do two things really well — they buy what they should have bought and they sell what they are about to need.”

Pompliano recommends diversifying a part of pension funds to the emerging class of digital asset to offset any loss that may be triggered in the equities market in the long run. He opines: “[These institutions] need to immediately evaluate the option of gaining exposure to Bitcoin, cryptocurrencies and the blockchain industry”. His logic for this reasons stems from the premise that:

“The assets have proven to be low correlation to date and have asymmetric return profile. A simple 1% allocation has the potential to materially negate any losses that could be experienced through an equity market fall.”

Pompliano further analyzed the investment strategy of Japan’s Pension Investment Fund revealed that if the fund had considered Morgan Creek’s #GetOffZero approach through its Digital Asset Index Fund last year, it would have seen a 45% return on the investment or an overall 0.46% improvement in portfolio performance. Further, he suggests that if things continue to play out as is, Digital Asset Index Fund may outperform the S&P 500 over the next 2-3 years.

Back in February, billionaire investor Mike Novogratz was puzzled why 1% of portfolios of all major macro fund wasn’t held in Bitcoin, and while most analysts have positioned the second half of 2019 to be the track for the next bull rally, Bitcoin, however, began a recent recovery, reaching a 5-months all-time high.

On the brighter side, millennials are forward-thinking as a recent survey revealed they don’t mind retirement plans facilitated by crypto. More so, Fairfax County Virginia is open to diversifying part of a police retirement fund into cryptocurrency.

 

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Crypto Stocks Enjoy Day in Sun After Bitcoin Revival

crypto stocks

The decidedly bullish outlook for Bitcoin over the past two days has certainly boosted sentiment in the stock market for companies involved in crypto and blockchain. According to the Bloomberg Galaxy Crypto Index, which tracks a basket of the biggest tokens, the value of these crypto stocks have jumped almost 30%, well on its way to a fifth consecutive week of gains after months of subdued activity.

The sudden climb for Bitcoin, which some are still wondering if an April Fool’s joke had anything to do with it, continued to record new highs in the past 24 hours, trading for as much as $5,315 in evening US trading before Asian markets sheared off some of those gains today.

The US small-cap crypto stocks were the main benefactors after Wall Street ended trading, with stocks like Riot Blockchain Inc extending a 12% gain by the same amount, touching $5.42 before shedding the gains. Others like DPW Holdings Inc and MArathon Patent Group Inc also continued to climb after the close.

The joy continued in Asia as Remixpoint Inc in Japan saw a 16% hike today to complete a 26% gain in four days, while Vidente Co has increased by 20% since Saturday.

The biggest winner for now appears to be billionaire crypto angel Mike Novogratz, whose shares of Galaxy Digital Holdings Ltd is up 160% today from a year ago. The Toronto-listed company will be breathing much easier after a 2018 fiasco when its trading desk lost USD 136 million in nine months.

 

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Report Suggests Retail Investors Are Slowly Amassing Bitcoin

Retail Investors Are Slowly Amassing Bitcoin

Institutional grade crypto investments have frequented the news of late, and while upcoming crypto derivatives may have been tailored to create a demand in this market niche, there is another set of investors who have been bullish about the industry from the get-go – the retail investors.

Data from crypto analytical provider Diar revealed that Bitcoin holdings of addresses holding 1 – 10 bitcoins before the burst have shown a steady growth of 5% since the last all-time high in December 2017.

The report did note that while 2018 had slightly deterred from 2015 through 2017 year-over-year average increase of 35% in the holdings of popular addresses; registering a mere increase of 0.7%, the year 2019 has picked up pace and is seeing a steady increase of 3% in bitcoin holdings in the 1-10 bitcoin containing addresses.

More so, within the system, there may be a fairly noticeable activity of even distribution of wealth, as addresses holding larger amounts of bitcoins (10 – 1000 BTCs) have followed opposite trends to those of 1 – 10 BTCs.

While this phenomenon could have contrasting interpretations; call it a positive sentiment on the part of retail investors in preparedness for the supposedly long-awaited bull run. On the other hand, according to the source, “it may mean an exodus of larger investors.” Whichever the case, increase in retail buying against the market trends and amassing more Bitcoin could perhaps mean that the true speculative value of Bitcoin lies in the unwavering hopes that Bitcoin could someday revolutionize the barter system.

Recently, the source published a report detailing the healthy state of Bitcoin transactions, describing the fees trend as touching 2014 lows.

While it appears that institutional investors may be sitting on the sidelines, billionaire investor Mike Novogratz had advised that hedge funds should have at least 1% of their holdings in Bitcoin as a safe bet whilst profiting from its volatility.

Retail investors’ holdings are currently estimated to be worth around USD 6 billion and perhaps with such a rise in optimism for the flagship decentralized cryptocurrency, this could grow over time to become a significant stake in Bitcoin’s circulating supply. And maybe by the time institutions finally become fully vested into crypto – Bitcoin most especially – Satoshi’s dream of a decentralized peer-to-peer electronic cash system may have taken full effect.

 

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Bitcoin’s Mr. Big, Michael Novogratz Donates to Princeton Students

Bitcoin's Mr Big, Michael Novogratz, Donates to Princeton Students

Mike Novogratz, ex-hedge fund manager and Bitcoin Billionaire has made a donation to students at the prestigious US university Princeton.

Novogratz is a well-known Bitcoin pundit and CEO of Galaxy Digital Holdings Ltd, a merchant banking institution dedicated to the digital assets and blockchain technology sector. Better known for his bullish predictions, last year he suggested that the crypto market cap was en-route towards a 20 trillion-dollar evaluation.

The donation – an undisclosed amount – is aimed at supporting Princeton’s “Novogratz Bridge Year Program” which gives students a gap year opportunity to work in Bolivia, China, India, Indonesia, or Senegal. Princeton University’s web page outlines the program’s aims:

“In addition to supporting community-based initiatives at each program site, Bridge Year aims to provide participants with a greater international perspective and intercultural skills, an opportunity for personal growth and reflection, and a deeper appreciation of service in both a local and international context.”

Both Michael Novogratz and his wife, Sukey Cáceres are both alumni of Princeton University and were happy to donate to their old alma mater. Novogratz sees the programme as essential leadership training, commenting that it offers “abundant opportunities for introspection and personal growth. Students return from it with a real sense of purpose, and an interest in being of service to their communities, and to the world.”

Novogratz suggested that he was proud to donate what he referred to as the couple’s 2017 “crypto winnings,” commenting that the opportunity for students to experience another culture was a way of building bridges, not walls; comments made in clear reference to US President Trump’s measures to protect the US border with Mexico.

Princeton’s President, Christopher L Eisgruber responded to the donation by commenting that  “extraordinary gift will enable generations of Princetonians to embark on a path of global citizenship as Bridge Year scholars.”

US Ivy League Universities have been in the crypto news over the past year with both Columbia and Stanford opening blockchain research centers in 2018, hot on the trails of the Massachusetts Institute of Technology. Add to these, Miami University in Ohio, Montclair State University, and the University of Pennsylvania, amongst others and the direction of blockchain education in the US is very clear; there is no way but up.

 

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Lending Productivity Defies Crypto Industry Downturn

Lending Productivity Defies Crypto Industry Downturn

Despite the 2018 market downturn, one clear beneficiary seems to have gained from Bitcoin’s drop in value over this past year.

Creditors targeting cryptocurrency investors who have chosen to hold their coins rather than sell at low prices have benefited, as well as finding business through investors who want to stock up on cheap coins for short sales.

A Bloomsburg report has suggested lenders been doing their own productive mining picking up sales throughout the bear market. The report suggests that the market is “putting lenders on both sides of Bitcoin’s bust: Helping believers pay their bills while awaiting a rebound, and also enabling bets by people who think the drop has further to go.”

One lender BlocFi, which lends fiat to cryptocurrency depositors, commented that its customer base and revenue had increased by 100 percent during the latter part of 2018 after Mike Novogratz invested $52.5 million in the firm. CEO Zac Prince suggested this kind of business was low risk, confirming that the company had never suffered losses from this kind of activity.

Genesis Capital, another lender had issued $700 million in loans with a current $140 million outstanding loans. The company’s CEO Michael Moro said that the company had been in profit since its launch in early 2018, commenting: “We’ve certainly proven that there is market demand, that there’s product fit and that it’s time to invest even more in this side of the business.”

Salt Lending, another lending company is doing so well that it is forced to expand its operation to deal with new businesses, adding new employees to the 80-person team every month.

Clearly, the bear market has a bullish side for those approaching cryptocurrency from an entirely different angle, where Bitcoin’s misfortune becomes a provider of business.

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Mike Novogratz Increases Galaxy Digital Shares Stake to 80%

Mike Novogratz Increases Galaxy Digital Shares Stake to 80%

Chief executive officer and founder of merchant bank Galaxy Digital, Mike Novogratz, has increased his portion of shares in the firm to nearly 80%.

Unpeterbed by Galaxy Digital‘s 19% loss in share value over 2018, Novogratz has reportedly purchased an additional 7.5 million ordinary shares in the company worth around USD 4.8 million. This represents 2.7% of the aggregate shares in the company, bringing his total stake in the stock to 79.3%.

Since New York-based Galaxy Digital Holdings Ltd. was first listed on Canada’s TSX Venture Exchange in August 2018, the cryptocurrency bear market influenced their poor market performance as the bank places a heavy focus on cryptocurrency and blockchain technologies. Ex-Goldman Sachs’ partner Novogratz, however, has continued to insist the market direction will change in 2019, predicting institutional investors will bring ”new highs” to Bitcoin’s price.

Novogratz’s move has succeeded in boosting the price of Galaxy Digital shares for now at least, with their value up 36% at the time of press, reaching USD 1.36 according to MarketWatch.

The ex-hedge fund manager of the Fortress Investment Group has been a longtime proponent of cryptocurrency, with around 20% of his net worth said to be distributed between Bitcoin and Ethereum.

 

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Upbeat Investors Maintain Bullish Predictions, Diversification

Upbeat Investors Maintain Bullish Predictions, Diversification

The likes of billionaire Tim Draper who is never short of making upbeat predictions regarding cryptocurrencies are not mainstream investors and are their observations are unlikely to have their desired impact on markets.

This is not to say that the next run on crypto markets could be a huge surge towards Bitcoin’s heady highs of 2017. This according to many is reliant not on input from players such as Draper and ex-hedge fund manager and CEO of Galaxy Investment Mike Novogratz, but more on historically-based theory.

Novogratz claims have done rather well from investing in cryptocurrency but the key is how much has he been able to lose. He stated in 2017 that 20% of his net worth was in Bitcoin and Ethereum, claiming that he made USD 250 million from cryptocurrency from 2016-2017.

It is worth considering then, the other 80% of his non-crypto assets. Like Tim Draper and any sensible investor, he diversified his investment portfolios early on, thereby enabling him to take the sort of hits that would be terminal for most other cryptocurrency investors.

Draper, holding an MBA from Harvard Business School, comes from a long line of banking venture capitalists and is far too canny to be totally crypto-asset dependent; another who can ride any storm with a 100% guarantee of survival.

This is obviously not the case for normal retail investors and individual traders, who take a deep breath with every dip in the market, waiting eagerly for the SEC to wake up and realize that cryptocurrencies are here to stay.

Jim Breyer, a billionaire venture capitalist, added that the world’s best computer scientists are heading to the blockchain space and this is where the future lies:

“So many of the very best computer scientists and deep learning PhD students and postdocs are working on blockchain because they have so much fundamental interest in what blockchain can mean. You don’t want to bet against the best and brightest in the world.”

Cryptocurrencies are clearly not a fad, but those warnings about not overloading one’s cryptocurrency portfolio but maintaining a sensible split between crypto and fiat remain true, at least until the market stabilizes. Billionaires are quite happy spending other people’s money. It may be more advisable to listen to Wall St which tends to be far more stoic, based on what horse racing pundits would call “form”.

The form is that over the past nine years, Bitcoin has survived five bubble-crash-build-rally cycles seeing it fall by about 85% on average and then recover to a new all-time high. From USD 19,500, Bitcoin has dropped about 82% in value and the 85% point would be at around USD 2,950.

So, another drop towards this figure shouldn’t surprise, nor should a bull run following that level. Bitcoin could still be first past the post. It’s early days.

 

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Galaxy Digital Down 70% Since Launch, Halts Trade After 18.6% 2-Hour Plunge

The stocks of Galaxy Digital Holdings Ltd, a major cryptocurrency-oriented hedge fund owned by billionaire Mike Novogratz, has declined from a listing price of USD 3.03 to USD 0.90 as of today, 28 November.

Yesterday, 27 November, was a particularly harsh day for GLXY, with an 18.6% drop in less than two hours, which caused the Toronto Stock Exchange (TSX) to temporarily suspend the trading of GLXY. The fund went public on TSX under the ticker GLXY on 1 August 2018.

A press release was issued by Galaxy Digital following the trading suspension, asserting that nothing happened in the company internally to cause the trading halt. TSX is overseen by the IIROC, which has the power to halt trading on any stock in Canada to ensure a fair and orderly market.

Bitcoin was at USD 8,000 on 1 August when GLXY went live for trading, and has since then declined to about the USD 4,000 level, likely causing heavy losses for any cryptocurrency hedge fund. The alternative cryptocurrency markets have faired even worse, with the total crypto market cap declining from USD 273 billion on 1 August to USD 115 billion on 25 November. Galaxy Digital is known to have invested hundreds of millions of US dollars into cryptocurrency startup companies, just as market conditions for startups rapidly worsened. Particularly, Galaxy Digital invested USD 325 million into the EOS ecosystem, a cryptocurrency which has seen steady and sharp declines since the day it moved to its own blockchain.

GLXY now has a market cap of USD 57 million and since Galaxy Digital is likely classified as a technology company, this is dangerously close to the CAD 50 million minimum listing requirement for TSX.

 

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Mike Novogratz: Institutional Investments in Bitcoin During Q1 2019 to Bring New Highs

Notorious Bitcoin bull and seasoned investor Mike Novogratz no longer stands by his USD 10K Bitcoin price prediction for 2018, instead suggesting that institutional investors may push it to that total early next year.

Novogratz’s comments came in a Bloomberg Television interview where he defended his previous prediction, saying the cryptocurrency process has been a learning curve with everything taking ”longer than expected.”

He compared the whole crypto ecosystem to a fourth grader being expected to materialize into a graduate. One of the issues Novogratz pointed to is the need for internal committees and testing to solve custody problems that leave investors ”screwed” if anything illicit happens to their assets.

The conversation turned to Fidelity Investment’s announcement of a ”world-class custody solution,” to quote Novogratz, aimed at institutional investors. Considering cryptocurrencies as bare financial instruments, this class of investors has been held back from entering the market due to uncertainty surrounding the storage of cryptographic keys that allow access to the assets

Fidelity is offering them insurance that they can place their bets with cryptocurrency knowing that they won’t lose their money in an illicit way.

Combined with Goldman Sachs’ crypto custody solutions in the works, Novogratz believes that ”slowly but surely institutional investors are becoming more comfortable with the whole asset class.” As he reasons it, the institutional flow of capital can be expected in Q1 of 2019, or early Q2.

Being a Bitcoin trader himself, Novogratz has shared that right now, he is going long. In defense of Bitcoin’s mid-week stumble last week, he argued that it is still a young asset that certainly is not without volatility. Meanwhile, he stands firm on his belief that it is a valuable store of value, particularly in countries facing economic crises such as Iran and Venezuela.

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Novogratz: Bitcoin Renaissance Coming as SEC Delays

Galaxy Digital Capital Management’s crypto billionaire founder Michael Novogratz is putting a very positive spin on Bitcoin’s current position, maintaining it has the hit the bottom and is ready to bounce.

Speaking yesterday at Yahoo Finance’s second annual All Markets Summit in New York, the ex-hedge fund manager has further cemented his support of cryptocurrencies, suggesting that Bitcoin is now holding its own above USD 6,000 as a store of value, arguing, “Bitcoin has held USD 6,000. Yes, it is off its highs, but it has established itself as a store of value… I think institutions are moving towards investing. It’s shocking how much has happened.”

Novogratz has long been an outspoken supporter of crypto and one of the industry’s staunchest promoters, maintaining that street level is where new technology will flourish where regular people do things like “rent rooms, ride cars and pay each other to do work“. He has made the point that decentralized “revolution” is yet to make its most significant impact on markets and that banks will miss out on Bitcoin’s continued rise.

Despite last night’s decision by the SEC to delay any decision on Bitcoin exchange-traded funds (ETF) the currency is holding its ground and taking many altcoins with it. The ETF decision is now thought to be delayed until February next year. An official statement by the Commission stated:

“Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change… Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved.”

Some investors see the decision to delay even further as an indication that the SEC is likely to grant approval to ETFs when it finally makes its move next year.

 

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