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Galaxy Digital in trouble? Mike Novogratz-founded digital asset co cutting jobs as steep losses mount

By Darius McQuaid

15:49, 2 November 2022

 Mike Novogratz, CEO of Galaxy Digital, gestures as he speaks during the Bitcoin 2022 Conference at Miami Beach Convention Center on 8 April, 2022
Novogratz’s firm attributed the hole in its accounts to unrealised losses on digital assets - Photo: Getty Images

Galaxy Digital, the global crypto-focused financial services firm founded by Mike Novogratz, is planning to reduce the size of its staff by a fifth.

The current crypto bear market has put additional pressure on Galaxy Digita, where Novogratz is  CEO.

A spokesperson from the company, responding to reports of a 20% cut in the workforce, told CoinDesk: “While our industry continues to face macroeconomic headwinds, Galaxy remains focused on building for the future state of institutional adoption and on enhancing long-term shareholder value. We are always considering optimal team structure and strategy and will share future plans when finalized.”


$554.7m Q2 loss

In August 2022, the company announced it had suffered a $554.7m net loss during Q2, three times the $182.9m loss experienced in the second quarter of 2021.

During this time Novogratz remained positive and said: “I am proud of Galaxy's outperformance during a challenging market and macroeconomic environment. Prudent risk management, along with our commitment to exacting credit standards, allowed us to maintain over $1.5bn in liquidity, including over $1bn in cash.


0.62 Price
+2.820% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


3,344.71 Price
-4.460% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


0.13 Price
-1.710% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872


65,626.85 Price
-0.680% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

"We remain in strong position to weather prolonged volatility, and to take advantage of strategic opportunities to grow Galaxy in a sustainable manner."

The hole in the accounts was primarily attributed to unrealised losses on digital assets and investments in its trading and principal investments division. Galaxy Digital said that record mining revenue helped offset some of its losses.

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Termination of acquisition

A week after the Q2 results, Galaxy Digital announced it had terminated its acquisition of BitGo, a crypto custody provider.    

Galaxy said it dropped the purchase because BitGo failed to provide an audited financial report for 2021, as required by the agreement between the two companies.

BitGo responded by launching a lawsuit against Galaxy Digital, saying Novogratz’s company had breached merger agreements.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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