In a recent report published by Galaxy Digital Holdings, the firm states that it incurred huge losses in nine months and this was before the last crash. The report cites “lack of overall trading volume in cryptocurrencies,” as one of the main reasons for the poor performance.
The Recent Crash Means Q4 May Be Worse
The report shows that things got bad in the third quarter. The free fall the crypto market experienced in the past few days means quarter four promises to add more losses to the company.
In the third quarter, net realized, and unrealized losses on crypto assets at the firm’s trading operation totaled to $76.65 million. That figure brought the losses for the first three quarters of the year to $175.68 million.
According to the company, the hit in Q3 was chiefly caused by losing bets on Bitcoin, Ether, and XRP.
The firm recorded a net realized loss of $38 million for digital assets in Q3. The quarter alone accounts for more than a third of its nine-month loss. It also had total operating expenses of almost $30 million in the same period.
The report shows that by the end of Q3 the firm held cryptocurrencies with a ‘fair value’ of $123 million. Also, the total assets held by the firm stood at $418.5 million at the end of Q3, up from $54.7 million at the end of 2017.
The company said it employs several trading strategies including cross-exchange arbitrage and also ‘market neutral’ trading strategies across digital assets and crypto exchanges.
Mike Novogratz founded galaxy Digital Holdings. He is a former Goldman Sachs partner and hedge fund manager who was one of the first high profile Wall Streeters to jump on the crypto bandwagon as the price of virtual currencies soared in recent years.
Recently speaking to FT, he said that this year has been tough for his company. Adding that it “sucks to build a business in a bear market.”
However, he is hopeful things will change come the next year. He predicted that financial institutions would move from investing in crypto funds to investing in virtual currencies themselves by the first quarter of 2019.
“You’ll see that flip next year. That’s when prices start moving again.”
