Galaxy predicts 74% Bitcoin price increase first year after ETF launch

October 25, 2023 Coin Telegraph

blackrock

Currently, a 74% increase takes Bitcoin to over $59,000 and that doesn’t factor in “second-order effects,” says Galaxy Digital.

Bitcoin’s (BTC) price will increase 74.1% in the first year after spot Bitcoin exchange-traded funds (ETFs) are launched in the United States, according to estimates from crypto investment firm Galaxy Digital.

In an Oct. 24 blog post, Galaxy Digital research associate Charles Yu estimated the total addressable market size for Bitcoin ETFs would be $14.4 trillion in the first year after launch. He obtained the 74% figure by assessing the potential price impact of fund inflows to Bitcoin ETF products using gold ETFs as a baseline.

According to Yu’s estimates, Bitcoin’s price would increase 6.2% in the first month after an ETF launch before steadily trending downward to a 3.7% monthly increase by month 12.

*Spot Bitcoin ETF estimated one-year inflows by month and Bitcoin price impact. Source: Galaxy Digital Research*

Yu used Bitcoin price data from Sept. 30, but a 74.1% increase in Bitcoin’s current price would see it hit $59,200.

Markus Thielen, head of research at digital asset financial services firm Matrixport reached a similar figure in an Oct. 19 post, estimating Bitcoin could rise to between $42,000 and $56,000 if BlackRock’s spot Bitcoin ETF application is approved.

Yu predicts the U.S. Bitcoin ETFs’ addressable market size to reach $26.5 trillion in the second year after launch and $39.6 trillion after the third year.

*Spot Bitcoin ETF market sizing and inflow estimates over the first three years. Source: Galaxy Digital Research*

Yu acknowledged a delay or denial of spot Bitcoin ETFs would impact its price prediction.

However, he said the estimates were still conservative and didn’t factor in “second-order effects” from a spot Bitcoin ETF approval.

“In the near-term, we expect other global/international markets to follow the U.S. in approving + offering similar Bitcoin ETF offerings to a wider population of investors,” Yu wrote.

He added “2024 could be a big year for Bitcoin” citing ETF inflows, the April 2024 Bitcoin halving and “the possibility that rates have peaked or will peak in the near term.”

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Embattled Crypto Exchange FTX Hires Billionaire Mike Novogratz’s Galaxy Digital To Manage Recovered Crypto

August 24, 2023 The Daily Hodl

FTX files motion for Galaxy Digital to manage recovered crypto holdings

August 24, 2023 Coin Telegraph

bankrupt

Galaxy Digital is set to manage the sale of bankrupt FTX’s crypto holdings and facilitate the staking of certain tokens to generate passive yield.

Mike Novogratz’s digital asset management firm Galaxy Digital looks set to manage the remaining cryptocurrency holdings of bankrupt cryptocurrency exchange FTX.

On Aug. 24, the company filed a motion with the United States District Court for the District of Delaware seeking authorization and approval of guidelines for the sale of digital assets recovered during ongoing bankruptcy proceedings.

The filing outlines FTX’s requests and plans to transfer some $7 billion worth of recovered cryptocurrency tokens under Galaxy Digital’s management following the exchange’s collapse in 2022.

FTX intends to provision for the potential sale of its cryptocurrency holdings and stake tokens through Galaxy Digital, as set out in its preliminary statement. The filing notes a “comprehensive management and monetization plan” for its cryptocurrency holdings that intends to reduce exposure to volatility and potential fiat repayments to creditors.

FTX intends to retain Galaxy Digital as a registered investment adviser, tapping into its “specialized knowledge” of digital asset markets to assist the company in maximizing the value of its token portfolio.

The company noted a number of potential benefits of the partnership, including being able to anonymously sell its holdings into the markets and mitigate the risk of market manipulation.

“Similarly, the Debtors expect that the Investment Adviser’s expertise will be crucial in assessing

FTX notes that the general investment guidelines will see Galaxy Digital sell various FTX-owned digital assets in the future, as well as being responsible for hedging Bitcoin (BTC) and Ether (ETH) before any potential sales.

FTX will look to sell its crypto holdings for fiat to reduce exposure to market volatility while taking advantage of liquid hedging markets for Bitcoin and Ether to lessen exposure to unexpected price fluctuations before their sale.

*FTX’s filing outlines plans to stake and sell some of its cryptocurrency holdings through Galaxy Digital. Source: SEC filing.*

Decentralized Finance also gets a nod in the filing, with FTX noting that it intends to stake certain cryptocurrencies to generate passive yield income under the guidance of Galaxy Digital:

“The debtors submit that staking certain digital assets pursuant to the staking method will inure to the benefit of the estate - and, ultimately, creditors - by generating low risk returns on their otherwise idle digital assets.”

As bankruptcy proceedings continue, FTX recently filed a proposed restructuring plan that hints at creating a rebooted offshore exchange. This could see creditors be given the option to get a portion of their lost funds or opt for a share of equity, tokens and other interests in an FTX reboot.

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Crypto investors cool on Bitcoin funds, turning to Ether and XRP

July 25, 2023 Coin Telegraph

Ark Invest

Bitcoin-related funds saw outflows of $13 million over the past week, reversing five weeks of bullish inflows, according to Coinshares analyst James Butterfill.

Bitcoin-related investment products appear to have lost some of their sheen among crypto investors, recording its first week of outflows since Blackrock filed for spot Bitcoin ETF in June.

According to a July 24 report by CoinShares’ head of research, James Butterfill, Bitcoin (BTC) investment products saw outflows of $13 million for the week ending July 21, reversing five weeks of inflows.

Short Bitcoin products also saw outflows of $5.5 million in the week.

Bitcoin Fear and Greed Index is 50 ~ Neutral
Current price: $29,178 pic.twitter.com/T1DMFpsX9p
— Bitcoin Fear and Greed Index (@BitcoinFear) July 25, 2023

In contrast, Ethereum (ETH) and XRP (XRP) investment products recorded combined inflow of $9.2 million over the last week.

Butterfill noted that Ethereum investment products were the best performer last week with inflows of $6.6 million, while XRP funds recorded an inflow of $2.6 million. Other altcoins, such as Solana (SOL) and Polygon (MATIC) tracked inflows of $1.1 million and $0.7 million respectively.

*Flows by the top digital asset investment products. Source: CoinShares.*

The apparent change of heart follows Ripple’s partial victory against the United States Securities and Exchange Commission on July 13, where the court ruled that XRP isn’t a security when sold on exchanges to the general public.

The news spiked XRP’s price up 76% to $0.83 before cooling off to $0.69 at the time of writing.

Bitcoin however still remains the dominant digital asset investment product, with $558 million in inflows so far in 2023 and a total of $25.0 billion in assets under management — amounting to 67.4% of the total market share.

BTC is currently priced at $29,128, down 3.1% over the last 24 hours.

Over the last month, a host of financial institutions have filed for Bitcoin spot Exchange Traded Fund applications with the SEC since mid-June, including BlackRock, ARK Invest, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and WisdomTree.

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US ‘dominates’ crypto startup funding in Q2: Report

July 16, 2023 Coin Telegraph

Coin Telegraph

US-based crypto startups attracted 45% of all venture capital funding invested in the crypto industry, followed by the United Kingdom claiming 7.7% and Singapore with 5.7%.

Despite facing regulatory scrutiny in the United States, crypto firms continue to innovate, with nearly half of all capital investments flowing towards U.S. crypto businesses, according to a recent report.

Published by crypto investment firm Galaxy Digital on July 14, the report stated that US-based crypto start-ups had a significant share of interest from venture capital firms.

“US-based crypto startups accounted for more than 43% of all deals completed and raised more than 45% of the capital invested by VC firms.”

This was followed by the United Kingdom claiming 7.7% of capital investment, Singapore with 5.7% and South Korea with 5.4%.

However, it was noted that the total amount of capital invested in crypto and blockchain startups continued to decline quarter on quarter.

“Only $720m was raised by 10 new crypto VC funds in Q2 2023” it noted, pointing out that this is the lowest since the beginning of the COVID-19 pandemic, in Q3 2020.

“Crypto and blockchain startups raised less money across the last three quarters combined than they did in just Q2 last year.”

It was further noted that while companies in the “broad Web3 category” had more deals, companies in the “trading category” raised more capital.

*Extract from Galaxy Research Q2 Report comparing total VC deal count to total capital investment since Q1 2016. Source: Galaxy Research*

This comes amid the United States Securities and Exchange Commission taking action against a number of U.S. crypto firms in recent times.

Most recently, its case against Ripple, alleging that its native token XRP (XRP) is a security, was ruled partially in favor of Ripple on July 13, stating that it is not a security for retail sales.

Cointelegraph previously reported on June 18 that Ripple CEO Brad Garlinghouse believes the SEC is “looking to kill” innovation and the cryptocurrency industry in the U.S.

He argued that its handling of the Hinman speech documents during the Ripple case isn’t about “any one token or any one blockchain,” but more so the overall stance that the SEC has towards the crypto industry.

This comes after the SEC took action against major crypto exchanges Coinbase and Binance only a day apart on June 5 and June 6.

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Bitcoin ETF would be the ‘seal of approval’ from SEC: Mike Novogratz

July 13, 2023 Coin Telegraph

bitcoin etf

The Galaxy Digital founder believes approval of a spot Bitcoin ETF would essentially be a United States regulator and government nod for Bitcoin.

The approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) would equate to a “seal of approval” for Bitcoin from the United States government and its securities regulator, says Mike Novogratz.

In a July 12 interview with Bloomberg TV the founder of crypto investment firm Galaxy Digital spoke about the multiple spot Bitcoin ETF filings before the Securities and Exchange Commission (SEC), including one from the $10 trillion asset manager BlackRock.

“What I do think is BlackRock, Invesco [and] the group of ETF providers is a real signal that adoption is coming,” Novogratz said.

He added many are “nervous” about investing in crypto and the approval of a spot Bitcoin ETF would be an “easy first step” for most to start investing in the asset.

“I just think if it happens it's the seal of approval from the SEC and the U.S. government.”

Novogratz explained there is a “giant infrastructure” in place for the ETFs. Along with BlackRock, proposed ETFs from Valkyrie, Invesco, VanEck, WisdomTree, Fidelity and a joint fund by ARK Invest and 21Shares are also lined up for approval. Novogratz believes that many of these will likely end up being approved.

“The SEC is not going to approve one so you're going to have these giant sales forces out there giving access to people that didn't have access before.”

SEC chair Gary Gensler has previously claimed that “everything other than Bitcoin” falls under his agency’s purview and other crypto projects “are securities" as there are typically known developers and profits are anticipated based on their work.

Novogratz was evasive when asked his thoughts on if Galaxy and Invesco’s spot Bitcoin ETF would be able to list before the end of the year.

“This SEC has been really stubborn and really tough on crypto,” he said.

“No one of significance has gotten through the listing process. We are in that process and it has been a long and frustrating path. I'll leave it at that,” he added.

“I think we're probably going to need either a change of heart at the SEC or a change of administration to see real progress in crypto regulation here in the U.S.”

Novogratz predicted the price of Bitcoin will end the year at a high. “If you take out the top we’ll have a nice leg up,” he said.

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BlackRock’s Bitcoin ETF ‘is the best thing to happen’ to BTC, or is it?

June 16, 2023 Coin Telegraph

Adam Cochran

Galaxy Digital CEO Mike Novogratz was among those over the moon with the news, others warn it could be the start of a major institutional takeover.

BlackRock’s latest filing for a spot Bitcoin (BTC) trust will drive investors’ confidence in Bitcoin and may even be “the best thing that could happen” to BTC, according to some crypto industry observers — but others warn of a hidden cost.

During an interview on June 16, Galaxy Digital CEO Mike Novogratz said the approval of BlackRock’s ETF application would be “the best thing that could happen to $BTC.”

“I say a Hail Mary every night that Larry Fink and @blackrock pull off a @bitcoin ETF," Novogratz reportedly said on a Fox News segment.

Fun being on @LizClaman show!! And yes, @BlackRock getting a $BTC ETF through would be the best thing that could happen to $BTC. https://t.co/2fFBeB9eyo
— Mike Novogratz (@novogratz) June 16, 2023

Meanwhile, cryptocurrency analyst James Edwards of Finder.com — a financial product comparison website — told Cointelegraph that the timing of BlackRock’s filing should provide “confidence” in both Bitcoin as an asset and also Coinbase in its upcoming legal battle fight with the SEC:

“BlackRock's willingness to press on with a Bitcoin ETF at a time when the SEC is on a warpath against crypto is very telling. It shows confidence in Bitcoin’s status as a commodity – rather than a security,” he said, adding:

“It’s unlikely that BlackRock would push forward with an ETF of this nature without serious consultation with regulators and confidence in Bitcoin's future legal status.”

BlackRock’s intention to use Coinbase Custody to control funds should also be seen as a massive confidence booster for Coinbase as it prepares its legal defense, Edwards explained.

He added that BlackRock — the world’s largest asset manager — likely wouldn’t partner with Coinbase had they not been “confident” in Coinbase’s legal position.

The downside

Others argue that the traditional investment giant's latest moves undermine the "ethos" of decentralized cryptocurrencies, or, that the company may find a way to profit from retail investors.

Investor Scott Melker explained in a June 16 interview that such an approval would be a disservice to crypto-native innovators who built the industry:

“As good as this may be for institutional adoption of the space, it kind of violates the ethos, it is a bit of a dishonest push away from the people who built the industry in the United States.”

Cinneamhain Ventures partner and Ethereum bull Adam Cochran believes that BlackRock will swoop in on the “discounted coins” of retail investors, a theory also shared by Melker.

Blackrock ETF… https://t.co/3g77QNdAun
— The Wolf Of All Streets (@scottmelker) June 15, 2023

Steven Lubka, a managing director at Swan Bitcoin shared a similar view, predicting that BTC will reach $1 million, but few retail investors will reap the rewards because the bulk of BTC will be owned by BlackRock, Goldman Sachs, and other ETF issuers.

Melker added that Wall Street firms will continue to move into the space and that U.S. regulators will likely “choose them” over incumbent platforms.

ARK Invest, Grayscale, Fidelity, Galaxy Digital, VanEck, Valkyrie Investments, NYDIG, SkyBridge and WisdomTree are among the other investment firms that have applied to the SEC for similar Bitcoin and cryptocurrency ETFs.

Since the news was first reported, the price of BTC has increased 2.2% to $25,584 at the time of writing.

Interestingly, the Fear & Greed Crypto Index increased from 41 to 47 — leaving the fear zone — following the news of BlackRock’s filing.

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US court dismisses BitGo’s claims in $100M lawsuit against Galaxy Digital

June 12, 2023 Coin Telegraph

BitGo

Vice Chancellor J. Travis Laster of the Delaware Court of Chancery said Galaxy had a “clean termination right” to the acquisition of BitGo, which it announced in 2022.

The Delaware Court of Chancery in the United States has granted a motion from crypto investment firm Galaxy Digital largely dismissing digital asset custodian BitGo’s case following a dropped acquisition of the firm in 2022.

According to court documents filed on June 9, Vice Chancellor J. Travis Laster dismissed BitGo’s complaint against Galaxy Digital with prejudice. The decision followed Galaxy dropping its decision to acquire BitGo in August 2022 as part of a $1.2-billion deal after extensive efforts, citing a breach of contract. BitGo subsequently filed a lawsuit against Galaxy seeking $100 million in damages.

In his ruling, Laster said Galaxy had a “clean termination right” to the BitGo acquisition based in part on BitGo’s failure to deliver certain financial statements in its efforts to go public in the United States. A Galaxy spokesperson told Cointelegraph the company was “pleased” with the court’s decision to dismiss BitGo’s claims.

“There are no facts alleged that could make it reasonably conceivable that the exercise of the termination right was inconsistent with the implied covenant of good faith and fair dealing,” said Laster.

We’re pleased with the court’s decision to dismiss BitGo’s claims. Now is the time for all of us to work together and focus on the task at hand: Upgrading the global financial system in a manner that promotes innovation and protects investors and consumers alike. pic.twitter.com/xPrMP8AghW
— Galaxy (@galaxyhq) June 12, 2023

Operated by Mike Novogratz, Galaxy Digital announced its intention to acquire BitGo in May 2021 as part of its public offering in the United States. However, in 2022 the BitGo deal fell apart, and the company disclosed $77 million in exposure to failed crypto exchange FTX, which declared bankruptcy in November.

It’s unclear what legal avenues BitGo may have following the Delaware court decision. Cointelegraph reached out to BitGo’s legal counsel but did not receive a response at the time of publication.

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Crypto markets ‘lackadaisical’ as institutional buying slows — Novogratz

June 2, 2023 Coin Telegraph

Coin Telegraph

The Galaxy Digital CEO said there has been a recent lack of institutional interest in cryptocurrency buying, which has led to deflated enthusiasm in the markets.

Galaxy Digital CEO Mike Novogratz has described the broader crypto market as being “lackadaisical” — or lacking enthusiasm — due mainly to a shying away of institutional investors from cryptocurrencies.

In a June 1 interview with CNBC, Novogratz said that while the relatively small retail buyers add some stability to the market with their modest holdings, the lack of large-scale buyers is becoming a concern.

Mike Novogratz on CNBC Market Alert Source: CNBC

“There’s a constant bid from retail. We’re seeing it through all the platforms, and there’s just not a lot of institutional excitement right now.”

The claims echo a May 31 report from Coinshare’s head of research James Butterfill, which detailed that institutional buying of digital assets saw outflows totaling $39 million as of last week, the sixth consecutive week of outflows.

Novogratz has however pointed to two significant developments in Asia that may help shift the tide.

First, he pointed out that Chinese social media app WeChat now offers Bitcoin (BTC) price quotes on its app, something he considers a significant milestone given its popularity. At the time of writing WeChat has 1.3 billion monthly active users, according to data from Statista.

Wechat is available for #Bitcoin search and only Bitcoin. A small but big step of China/HK embracing crypto pic.twitter.com/DHq4uqnq5C
— Qinwen Wang (@Qinwen_Wang) June 1, 2023

Secondly, Novogratz looked to Hong Kong which has now officially begun allowing retail customers to trade crypto on regulated exchanges for the first time, an indication of increasing Asian adoption.

In an interview with Cointelegraph, Tommy Honan, the head of product strategy at Swyftx agreed that the crypto market has very much “fizzled out” over the course of the last month.

“Activity levels among institutional investors are definitely more muted. But it’s not just institutions, retail investors have been hit in the hip pocket by cost of living pressures,” he said.

As crypto firms are scrambling to come to grips with an ever-more precarious regulatory landscape in the U.S., Honan still expects there to be a strong price recovery when large firms decide to jump back in.

“Institutions will come back to the market and when they do, they’ll come back hard. I just don’t expect that to happen in the US until one of two things happens,” he said.

“You either need settled and sensible rules in place for crypto. Or you need the Republicans to win next year’s U.S. elections. Crypto has almost overnight become a crazily partisan issue, which is exactly what the industry didn’t want or need.”

Much like Novogratz, Honan says that Hong Kong presents a unique opportunity for the crypto market, unleashing a new wave of investors into the market as well as offering up a place for U.S.-based firms to set up shop if need be.

Chinese Central Television station has just broadcast news regarding Hong Kong letting people buy Bitcoin, Ethereum, and other coins.

This is huge news! China is waking up to crypto again.

What is happening in Hong Kong is only possible with approval from Beijing. Get ready! pic.twitter.com/Zxdi7UZNHK
— Lark Davis (@TheCryptoLark) May 24, 2023

“We’re watching developments in Hong Kong very closely. If Hong Kong is being used by mainland China as a testing ground for the safe adoption of crypto, it would be a significant tailwind for the market,” Honan said. “We’ve all been looking West for the next bull trigger. Maybe we should have been looking East.”

With Hong Kong now opened up for crypto-related business, a growing number of firms are currently jostling to secure a license.

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