Common Market: Galaxy Digital Q3 '19, $423m Assets, Long BTC
Matrixport, Bitpanda, HodlHodl, Ramp, Kraken, Huobi, Skrill, Germany and Hut8 mining
|Etienne Brunet||Dec 1, 2019|| 1|
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🕵️ Q3 Report Galaxy Digital
Galaxy promoted Ashwin as CFO formerly chief accounting officer
Trading: The number of on-boarding increased in Q3 vs Q2 despite lower trading volume. In other word, investors want to be prepared in case the market pick up
New products: Launched the Galaxy Bitcoin Fund and the Galaxy Institutional Bitcoin Fund, both are passively managed funds targeting institutional and HWNI investors and competing directly with Grayscale offering (DCG)
Galaxy EOS VC: New investments in Loopland Group Holding LLC (Don’t find any information, if anyone has a clue let me know!), Verisart, Inc. (Certify and verify artwork), Immutable, Predictive Pop, Inc. (Next-Gen DMP & Data Agency), and a follow-on investment in FinCo Services, Inc (Don’t find any information, if anyone has a clue let me know!)
GDCM: Galaxy capital management was composed of $325m AuM from EOS VC and $11m AuM from their index fund
Advisory: The advisory business started to see some growth with Canaan IPO and Silvergate IPO in November ‘19 which is not accounted in this report.
Cash: Galaxy had $78m of cash as of September 2019 and about $124m of digital assets (BTC, ETH, FTX and WAX)
Burn: Total Opex for Q3 ‘19 was $22m vs $29m in Q3 ‘18. Total Opex for 9months ‘19 was $64m vs $54m. The bulk of the costs was salary, G&A and equity compensation.
Business line: The table below highlights the different business lines as of September ‘19 for Q3 ‘19. The main revenue driver was the AM business with $1.3m
Holding: Galaxy has an active principal investment arm including investment in Equity (Ripple, BlockFi etc..) / 75% of the portfolio at fair value and LP position (Pantera, Blockchain Capital) / 25% of portfolio at fair value .
Equity: BlockFi and NuCypher are the current winner in their portfolio. Ripple is the largest single position of Galaxy with $27m at fair value or about 19% of total fair value
Digital Assets - Long BTC and a bit of FTX: In terms of digital assets, Galaxy bought for $124m of Bitcoin, $16m of Ethereum and (surprisingly) $1.2m of FTX tokens at about $0.67 per token (As a reminder, FTX is the token of FTX crypto derivative exchange). The current fair value of the total top 4 digital assets were $124m vs $190m at cost in Q3 ‘19
🐦 Tweets of the week
My friend Larry asked an interesting question on bitcoin mining. If anyone has some insights feel free to share! Would love to hear your thoughts
🤹 Startups News
Matrixport, launched by former Bitmain CEO Jihan Wu, will expand its services from Asia to Europe through its new Zurich office. Registered under the name of Chaintech in Switzerland, Matrixport will begin offering its trading, lending and custody services in the country. More info
Bitpanda welcomes Michael Poetscher as CMO to lead global marketing strategy and former TourRadar CMO. Note, Bitpanda has 1m+ registered users and 160 staffs since started seven years ago… More info
HodlHodl launched a liquidity week to support Lebanon citizens during the tough economic period More info
Another great analysis by Deribit Insights on Rollback and Reimbursement More info
Ramp Instant went live inside web, mobile dApps and wallet with Zerion, Multis, AdEx and Universal Login SDK As a reminder, Ramp uses a non-custodial and peer-to-peer mechanism combined with a escrow mechanism on smart contract. More info It’s great to see open API being leveraged though it would be interesting to see if it gets traction outside of Europe
🎁 Startups Product & Partnership
Kraken, One of Oldest Bitcoin Exchanges, Joins Silvergate Exchange Network. This will enable its clients to deposit and withdraw U.S. dollars from Silvergate accounts with no fees, 24/7 to Kraken and other crypto exchange partners. Most crypto publications have not really understood the importance of the SEN network for market participants but this has dramatically improved real-time USD settlement. It’s huge for liquidity, allow to make market more efficient etc.. great job Silvergate!
Huobi Russia, a Moscow-based franchise of the Singapore-based crypto exchange, has launched Russian ruble deposits and will soon have its own token listing service. More info
Global payment provider Skrill added a new feature that allows buying all cryptocurrencies available on the platform directly with Bitcoin. It effectively eliminated the need for converting Bitcoin into fiat in order to make a purchase. More info
🏦Regulations / Universities
A proposed change to legislation in Germany could allow banks to facilitate the sale and custody of digital assets, including Bitcoin. If the law is successfully put onto the books More info
“starting in 2020, financial institutions will be able to offer their customers online banking, virtually at the touch of a button, along with classic securities such as stocks and bonds, as well as cryptocurrencies”
In January 2020, the regulatory landscape for crypto businesses will completely change in Europe. It will affect funds managing digital assets and provider of fiat on-ramp. The aim is to combat money laundering and combat terrorism
Europe is planning to build an improved instant payment system to taper off U.S. payment giants’ dominance across the continent. More info
“By that time, everyone in the EU, people and companies, should be able to carry out domestic and cross border instant payment transactions in all payment situations” via banks, said Dombrovskis.
💰Fundings & M&A
Hut 8 Mining Corp, a Canadian company indulged in digital asset mining, announced the acquisition of nine Blockbox AC data centers from the Bitfury Group, costing $7m. More info The news was seen very positively by the market with a +7.5% price increase following the announcement
Everyone is talking about San Francisco as the epicentre of everything in crypto. Well, I wanted to shed light on Europe and show how exciting the ecosystem is.
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