Bitcoin Believer Novogratz May Salvage Struggling Crypto Startups With $250M

There may be a drought in the broader retail Bitcoin market, but in the crypto financier space, spirits seem to be as high as ever. Well, that’s what Mike Novogratz, the founder of merchant bank Galaxy Digital, thinks anyway. Just recently, the former Wall Street investor, who held stints at Fortress Financial and Goldman Sachs, purportedly began a search for funding in the nine-digit realm.

Related Reading: Unbreakable: Mike Novogratz Remains a Bitcoin Bull in a Bleeding Market

Fervent Bitcoin Bull Novogratz Pushes The Envelope

Over recent years, Novogratz, often deemed crypto’s most fervent, persistent bulls and believers, has quickly expanded Galaxy, his brainchild, to cover a number of this sector’s expansive roster of facets. According to a Business Insider report, which cited those familiar with the matter, the American investor, who stumbled across Bitcoin in 2013, is looking to expand his firm’s borders yet again.

The outlet’s insiders purportedly claimed that Novogratz is seeking a minimum of $250 million for a credit fund, which would offer U.S. dollar loans to crypto and blockchain upstarts. If this fund goes live, Galaxy will purportedly gather, sift through, and approve industry companies for loans, before asking for holdings like Bitcoin, properties, and even ASIC machines as some much-needed collateral.

As crypto firms, such as Huobi, Bitmain, BlockEx, Shapeshift, and Blockfolio, have been struggling recently, laying off workers to preserve their war chests, Galaxy will likely vet loan candidates with an iron fist.

Two sources told Business Insider that the fund could close its first round of fundraising in March, as Galaxy wishes to capitalize on swelling demand from borrowers. The insiders didn’t reveal if any prospective investors have taken up Novogratz on his offer yet.

Although Novogratz’s new venture evidently has some semblance of novelty, as it would line the pockets of investors and bolster the crypto industry simultaneously, some are wary that it may not garner an adequate amount of traction during its fundraiser.

Crypto Funds Stutter In 2018

In a recent report, Crypto Fund Research revealed that while “2018 was a record year for crypto fund launches,” the numbers are not as they seem. While 239 funds launched over the past 12 months, 42 funds were closed, playing into Anthony Pompliano’s theory that such opportunities would begin to shutter operations due to ongoing financial qualms. The chief executive of the research group, Josh Gnaizda, went on to claim why the 239 sum isn’t as bullish as it ostensibly seems. Gnaizda wrote:

“The record number of new launches this year doesn’t accurately reflect the current reality. Nearly half of all crypto funds launched this year were launched in Q1 2018 when euphoria over prices was still peaking. Since that time, we’ve seen not only fewer launches, but also an increasing number of funds being dissolved. We expect this trend to continue in the short-term.”

But it isn’t all “bad news bears” for crypto’s funds and venture investors. The Crypto Fund Research report went on to reveal that high-ticket cheques continued to flow in, even as Bitcoin and other cryptocurrencies dropped as 2018 elapsed. In fact, the Bay Area-based research unit revealed that the asset under management figure for all crypto funds grew to over $10 billion. And it seems that Galaxy is attempting to capitalize on this uptick, even as cynics continually tout their skepticism.

And Galaxy isn’t alone in its efforts to prop up a crypto fund, even as the crypto winter continues to ravage industry participants. As reported by NewsBTC previously, 1confirmation, one of the first crypto-dedicated venture groups, is looking for prospective investors. Sources revealed that 1confirmation is looking for $60 million for its second fund — more than double the amount it raised in a previous fundraiser.

With this newfangled venture, 1confirmation, which has holdings in recently-launched Veil, Coinbase, Bitcoin, Ethereum, among other opportunities, plans to back nascent crypto projects by purchasing equity or tokens. Although 1confirmation seemingly has high hopes for its fund, as its first venture secured funding from Mark Cuban, Marc Andreessen, and Thiel Capital, 2018’s downturn likely killed faith in this nascent sector.

But maybe — just maybe — 1confirmation and Galaxy Digital may have enough star power to attract the attention of high-net-worth individuals, Wall Street hotshots, and forward-thinking institutions that have a finger on the Bitcoin trigger.

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