Galaxy tips Bitcoin NFT market to hit $4.5B by 2025

March 4, 2023 Coin Telegraph

Bitcoin

Galaxy’s estimation was based on the rapid uptick of interest in Bitcoin NFTs, currency market infrastructure, and the potential to take some market-share away from Ethereum.

In a “base case” scenario, Galaxy Digital's research unit has tipped the burgeoning Bitcoin nonfungible token (NFT) market to hit a $4.5 billion market cap by March 2025.

Bitcoin NFTs, or Ordinals, have attracted a significant amount of attention since the Ordinals protocol launched in late January, enabling users to inscribe data such as images, PDFs video and audio onto individual satoshis, or sats that each represent 0.00000001 Bitcoin (BTC).

NFT giants such as Yuga Labs have even jumped in on the hype. On Feb. 28, the $4 billion firm behind the Bored Ape Yacht Club announced a Bitcoin-based NFT project dubbed “TwelveFold,” marking a notable form of recognition of the Ordinals movement.

In a new report published on March. 3, Galaxy researchers analyzed the potential growth of Bitcoin NFTs and made estimations “conservatively based on the current size of Ethereum’s NFT market” and its growth rate over the past few years.

“While there are notable differences between inscriptions and NFTs, it’s fair to say that a native on-chain ecosystem for NFTs has emerged on Bitcoin in a way that was never before possible, and its usage has been exploding.”

The report provided three different market cap predictions based on the firm’s analysis, covering a bear case, base case and bull case scenarios.

Looking at Galaxy’s baseline analysis, the report outlined that if Bitcoin NFTs can “expand to mainstream NFT culture like PFPs [Profile Pictures], memes and utility projects,” the market capitalization should increase to $4.5 billion.

The researchers also noted that the projection of $4.5 billion is also based on the “rapid development in inscription awareness coupled with the marketplace/wallet infrastructure already [being] out today.”

Fantastic research piece by @intangiblecoins at @galaxyhq on the rise of Bitcoin Ordinals:

- $4.5B base case market
- Help with Bitcoin's fee market
- Increase the design space for smart contracts

Read more here
— Dan Held (@danheld) March 3, 2023

In a bear case, in which Bitcoin NFTs don’t creep into the mainstream NFT market and pry market share away from Ethereum, Galaxy estimated that Bitcoin NFTs can still reach a market cap of $1.5 billion based on the current level of interest and supporting infrastructure.

On the bullish side of things, Galaxy researchers estimate that the Bitcoin NFT market could reach around $10 billion if it manages to provide strong competition to Ethereum NFTs, while also providing unique use cases.

*Estimated Bitcoin NFT market cap: Galaxy Digital*

At the time of the report, more than 250,000 Ordinals have hit the market, and highlighting the significance and utility of Bitcoin NFTs, the researchers noted that:

“The addition of sizeable data storage with strong availability assurances opens up a variety of use cases, many of which are only beginning to be explored, including things like new types of decentralized software or bitcoin scaling techniques. Even the NFT use-case alone, though, has the potential to dramatically widen the scope of Bitcoin’s cultural impact.”

The Bitcoin Dark Ages are over

Fun is back on the menu, boys pic.twitter.com/ybk5NKObmB
— Eric Wall ‍♂️ Taproot Wizard #2 (@ercwl) March 3, 2023

MicroStrategy, Tether adds to firms distancing from Silvergate as stock dives 57%

March 3, 2023 Coin Telegraph

10-K Filing

MicroStrategy confirmed that none of its 130,000 BTC is custodied by Silvergate. However, the firm does have a loan to pay off to the bank by Q1 2025.

Business intelligence firm MicroStrategy and stablecoin issuer Tether have become the latest two firms to publicly deny any meaningful exposure to Silvergate Bank.

The news comes after Silvergate announced on March 1 that it would postpone the filing of its annual 10-K financial report, which has many fearing the cryptocurrency bank may be on the brink of a bankruptcy filing.

This led MicroStrategy — which holds over 130,000 Bitcoin (BTC) — to confirm that its BTC collateral is not custodied with Silvergate.

The Michael Saylor-founded firm added that it will not need to pay back a loan from Silvergate until Q1 2025 and that a bankruptcy or insolvency event wouldn’t “accelerate” the loan repayment.

We have a loan from Silvergate not due until Q1 ‘25. There are mkt concerns re SI’s fin. condition. For anyone wondering, the loan wouldn’t accelerate b/c of SI insolvency or bankruptcy. Our BTC collateral isn’t custodied w/ SI & we have no other financial relationship w/ SI.
— MicroStrategy (@MicroStrategy) March 2, 2023

Paolo Ardoino, the chief technology officer of Tether, confirmed in a March 2 tweet that Tether is not exposed to Silvergate either.

#Tether does not have any exposure to Silvergate.
— Paolo Ardoino (@paoloardoino) March 2, 2023

A collapse of the cryptocurrency bank could prove costly for the rest of the industry.

Silvergate is a fintech firm that provides financial infrastructure solutions and services to some of the largest cryptocurrency exchanges, institutional investors and mining companies in the world.

It offers a 24/7 payments platform, named Silvergate Exchange Network, which has reportedly processed over $1 trillion in transactions since 2017.

The firm also provides a stablecoin infrastructure platform, digital asset custody management and collateralized lending services to several institutional players in the cryptocurrency industry.

*A diagram of Silvergate’s clientele and crypto offerings. Source:* *Silvergate Bank*

Despite the large network effects, the late 10-K filing appears to have had a consequential effect on its partnerships.

Within 24 hours of the late 10-K filing, Coinbase, Circle, Bitstamp, Galaxy Digital and Paxos confirmed that they will scale back their partnerships with the cryptocurrency bank in some capacity.

Gemini also announced that it has stopped accepting customer deposits and processing withdrawals through Silvergate ACH and wire transfers.

Others who have seemingly cut or reduced ties include Crypto.com, Blockchain.com, Wintermute, GSR and Cboe Digital, according to reports.

Silvergate failed to file their annual report citing regulatory investigations. Possibly not solvent.

They already lost majority of their partners. pic.twitter.com/LKdQtNfRRe
— Quinten | 048.eth (@QuintenFrancois) March 2, 2023

Concerns of Silvergate’s potential financial troubles first surfaced in Q4 2022, when it reported a net loss of $1 billion as a result of the shock collapse of FTX in November.

The exact dealings between Silvergate and FTX have been subject to a probe by the United States Department of Justice recently, although there’s been no accusation of wrongdoing at this point.

Plaintiffs in a newly proposed class-action lawsuit against FTX on Feb. 14 accused Silvergate of “aiding and abetting” a “multibillion-dollar fraudulent scheme” that was orchestrated by former FTX CEO Sam Bankman-Fried.

Despite many firms recently claiming not to have exposure to Silvergate, the bank still processed over $3.8 billion in customer deposits in Q4 2022. This was a steep fall from $11.9 billion in Q3 2022, according to Silvergate.

*Silvergate’s change in share price index on the New York Stock Exchange. Source:* *MarketWatch.*

Since the news of the late 10-K filing on March 1, Silvergate’s stock price has fallen a massive 58.7% to $5.57. The stock is now down over 97% since its all-time high of $219.7, hit on Nov. 14, 2021.

Galaxy acquires institutional crypto custody firm for $44M

February 23, 2023 Coin Telegraph

Galaxy acquires institutional crypto custody firm for M

asset storage.

Galaxy Digital invests $44 million to acquire institutional cryptocurrency custody platform GK8.

Galaxy Digital has invested $44 million into an institutional cryptocurrency custody platform to tap into its proprietary asset storage and management capabilities.

Mike Novogratz’s cryptocurrency investment firm has completed the acquisition of GK8, which has developed its own patent cryptocurrency custody technology aimed at giving secure asset management for institutional users.

The service specializes in providing cold vault technology that allows the execution of transactions without internet connectivity. Its in-house multi-party computation (MPC) vault provides the ability to automate transactions, and the service also provides access to Decentralized Finance (DeFi) networks, tokenization, NFT and trading.

A statement from Novogratz highlighted increased investor demand for custody services as a key reason behind the acquisition. GK8’s cold storage solutions and wallet technology will be onboarded into Galaxy Digital’s upcoming prime brokerage platform GalaxyOne.

The business deal will see Galaxy add an office in Tel Aviv to its organization, with nearly 40 GK8 employees becoming part of the wider group. GK8 founders Lior Lamesh and Shahar Shamai stay on through the acquisition to lead Galaxy’s custodial technologies offering.

GalaxyOne is touted to offer a broad range of cryptocurrency financial services to institutional-grade users on its launch. This will include trading, lending, derivatives, cross-portfolio margining as well as custodial offerings managed by GK8.

Galaxy doubled down on its investments into the cryptocurrency mining sector in December 2022, announcing a $65 million acquisition of Argo Blockchain’s main mining operation. The mining firm had to sell off its Helios mining facility to avoid bankruptcy during a tough year for the sector.

Galaxy Digital CEO ‘wouldn’t be surprised’ if Bitcoin hit $30K this quarter

February 16, 2023 Coin Telegraph

Galaxy Digital CEO ‘wouldn’t be surprised’ if Bitcoin hit K this quarter

$30k btc

Recent positive Bitcoin price action has been linked to a slowdown of U.S. inflation, Mike Novogratz thinks the price rally could sustain until the end of March.

Galaxy Digital Holdings CEO, Mike Novogratz, believes there's a chance Bitcoin (BTC) could return to $30,000 or above before the end of March.

According to a Feb. 15 Bloomberg report Novogratz spoke at a Bank of America conference the same day and said he would’ve been the “happiest guy” if 2022 ended with BTC at $30,000, but added:

“When I look at the price action, when I look at the excitement of the customers calling, the FOMO building up, it wouldn’t surprise me if we were at $30,000 by the end of the quarter.”

The prediction is much lower than others Novogratz has made in the past. The Galaxy CEO once believed Bitcoin could reach $500,000 by the end of 2027 if the United States Federal Reserve kept hiking interest rates.

Announcing #48 of Cointelegraph’s Top 100 influencers in Crypto and Blockchain@novogratz

Former Goldman Sachs partner turned crypto mogul and founder of @galaxyhq, a big investor who acquired @ArgoBlockchain's mining facility, and recently won an auction to buy @GK8_Security. pic.twitter.com/ejpcFzOsYQ
— Cointelegraph (@Cointelegraph) February 15, 2023

During Wednesday’s conference, Novogratz again made mention of rate hikes by Fed chair, Jerome Powell, who announced an interest rate hike of 25 basis points on Feb. 1. Novogratz said he didn’t expect the fed to change its tune anytime soon:

“What makes me skeptical that we can have the explosive, back-to-the-old highs this year is Chairman Powell. He’s really doing what he says he’s going to do, and I don’t see the Fed pivoting and cutting anytime soon.”

Alongside the Fed’s February rate hike, Powell indicated inflation in the U.S. had begun to slow, which saw Bitcoin shortly spike above $24,000 before declining below $22,000.

Following expected U.S. Consumer Price Index (CPI) January figures on Feb. 14, Bitcoin gained nearly 12% in the past 24 hours and hit over $24,700 — its highest level since mid-August 2022 according to Cointelegraph data.

Sentiment towards crypto also appears healthy, with the Crypto Fear and Greed index climbing nine points to 62 out of 100, moving the scale from “neutral” into “greed” territory.

*A one-year chart of the Fear and Greed Index shows its last highest ranking was a score of 60 on Mar. 28, 2022. Source:* *Alternative*

The index hasn’t been above a score of 60 since mid-November 2021, before the price crash that kicked off the 2022 crypto winter.

Bitcoin will still need to gain roughly another 22% by Mar. 31 to reach Novogratz's predicted price.

‘Categorically false’ — Attorney denies bids for Celsius assets were rejected

February 1, 2023 Coin Telegraph

Bank to the Future

The Celsius Official Committee of Unsecured Creditors hosted a two-hour town hall shortly after the filing of the Celsius examiners’ report.

The counsel representing Celsius’ official creditor committee has denied assertions that the bids for Celsius’ crypto assets have been rejected.

During a Jan. 31 Twitter Space “town hall” following the examiner’s report on Celsius, attorneys from White & Case LLP including Gregory Pesce and Aaron Colodny addressed the so-called “leaked” bids for Celsius’ crypto assets shared by crypto blogger Tiffany Fong.

“The assertion that the bids have been rejected is just categorically false,” said Pesce.

https://t.co/hbJ5GJchZC
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) January 31, 2023

Fong’s Jan. 27 post on Substack pointed to at least five firms that were reportedly interested in bidding on Celsius’ crypto assets including Binance, Bank To The Future, Galaxy Digital, crypto trading company Cumberland DRW and digital asset investment firm NovaWulf.

At the time Fong said the bids were “for the most part, abandoned” — referring to an earlier statement from a Celsius lawyer proclaiming the bids they received so far “have not been compelling.”

However, the Celsius Official Committee of Unsecured Creditors (UCC) attorney argued that this was not the case.

“The bids have not been rejected. That’s just wrong, and I hope I can disabuse people of that incorrect notion today."

The attorney refrained from confirming whether bids mentioned in the leak were accurate or not but said it was “regrettable” as it reduces the flexibility the committee has in the negotiation process.

“Every day, we and the debtors are providing public messages and private messages to potential investors about where they stand in the process,” explained Pesce.

“The messages that we sent them [...] is very planned out and structured so that we can play different parties against each other and make sure we get the last dollar for Celsius account holders because the success of that process will determine recoveries here.”

“It's therefore regrettable that this leak happened.”

“It's particularly unfortunate that this has been monetized by the source of that leak for publicizing her paid-for content page on Patreon,” he said, referring to Fong.

Fong has responded to the accusation, arguing the leaked bids were 100% free with “no paywall.”

“The leaked bids are NOT behind a paywall such a strange accusation,” she said.

The bids were always free - I have posts behind a paywall that involve my personal life / love life which are NOT in the public interest to keep them somewhat private.

The leaked bids are NOT behind a paywall such a strange accusation @CelsiusUcc
— Tiffany Fong (@TiffanyFong_) January 31, 2023

The crypto blogger released details concerning the five bids on Substack last week, which can still be accessed without payment at the time of writing.

Pesce said they are now investigating how the leak occurred, adding there was “significant concern that a potential investor that was involved in the process may be trying to manipulate it for their own benefit.”

“All that being said, we are working very hard to make sure that we can choose a path as quickly as possible and get this bankruptcy over. We're trying to mitigate the effects of that leak," he said.

The UCC attorneys also added some comments in light of the recent examiner's report on Celsius.

The examiner’s report shows in excruciating detail the improper, self-serving actions that Celsius (and its founders) took at customers’ expense, causing immense hardship to thousands of people. The UCC wants any responsible parties to pay for any bad acts.
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) January 31, 2023

“I'll be pretty blunt, you know, what Mr. Mashinsky and many members of his team did was wrong. Mr. Mashinsky lied. They covered up a lot of his lies through editing videos,” said Colodny.

“They put themselves ahead of the company, and they put themselves ahead of the account holders more importantly.”

The UCC lawyers said they will continue to explore a number of options for recovery including reinventing itself as a new, publicly-traded “recovery corporation,” selling off some of its mining equipment, as well as looking into “winding down Celsius or transferring crypto to a third party.”

Argo Blockchain accused of misleading investors in class action lawsuit

January 27, 2023 Coin Telegraph

Argo Blockchain

After a torrid 2022 that saw it sell off its flagship mining facility, Argo Blockchain's woes are worsening after a recent class action suit.

Investors of crypto mining firm Argo Blockchain have filed a class action lawsuit accusing the miner of making untrue statements and omitting key information during its initial public offering (IPO) in 2021.

A newly filed lawsuit on Jan. 26 is aimed at Argo and several of its executives and board members. It claims the firm failed to disclose how susceptible it was to capital constraints, electricity costs and network difficulties.

"The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading," the lawsuit read.

As a result, the investors claim the business was “less sustainable” than they had been led to believe which led to an overstatement of the miner’s financial prospects. The complaint noted:

“Had [the investors] known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.”

Argo released the information in question on Sep. 23, 2021, when the firm filed documents with the United States Securities and Exchange Commission (SEC) relating to its IPO.

7.5 million shares were issued to the public on the same date at an offering price of $15 resulting in proceeds of $105 million before expenses.

Since then, the miner’s share price has taken a beating and is currently trading at $1.96 per share after having fallen as low as $0.36.

*The share price decline of Argo Blockchain from Sep. 2021 to present. Source:* *Yahoo! Finance*

Cointelegraph requested comment from Argo but did not immediately receive a response.

The recent lawsuit comes just days after Argo regained compliance with Nasdaq’s listing rule on Jan. 23, which requires a company to maintain a minimum closing bid price of $1 for 10 consecutive trading days.

Argo has had to make some difficult decisions to weather the ongoing bear market and tough conditions facing crypto miners. It announced on Dec. 28 that it would be selling its flagship mining facility, Helios, to digital asset investment manager Galaxy Digital for $65 million.

The Helios mining facility during its grand opening. Source: YouTube

Crypto miners in general had a torrid year in 2022 — with high electricity prices, falling crypto prices and increased mining difficulty all eating into their bottom line.

Skybridge eyes stake buyback from FTX, as Galaxy CEO says he would like to ‘punch’ SBF

January 14, 2023 Coin Telegraph

Anthony Scaramucci

Anthony Scarammuci also noted that there was "clearly fraud" in the SBF and FTX debacle, while Mike Novogratz said there’s a side of him that would like to “punch” SBF in the face.

SkyBridge Capital CEO Anthony Scaramucci said that his firm can buy back the stake of the company it sold to FTX back in September last year. While Galaxy Digital CEO Mike Novogratz has indicated that he would be tempted to “punch” SBF right in the jaw.

SkyBridge and FTX

FTX Ventures acquired a 30% stake in the alternative asset manager SkyBridge for an undisclosed fee on Sept. 9, just a couple of months before FTX filed for bankruptcy in November.

Speaking to CNBC on Jan. 13, Scaramuci noted that in light of FTX’s troubles, SkyBridge is making progress in buying back that stake, but suggested the move wouldn’t be able to get sorted “until probably the end of the first half of this year.”

“We’re waiting for the clearance from the bankruptcy people, the lawyers and the investment bankers to figure out exactly what we’re going to be buying back, and when,” the CEO said, adding that "I think it will resolve itself favorably."

Speaking on former FTX CEO and founder Sam Bankman-Fried, Scaramucci outlined his thoughts that there has likely been some foul play there.

“I think it’s very clear now that there was fraud. We’ll of course have to let the legal system determine all of those things. But for Sam, he's got three of four of the principles that have worked alongside him have already pled guilty, and explained to prosecutors what they did,” Scaramucci said.

Caught up with @Scaramucci today. FTX and Sam Bankman-Fried bought a 30% stake in Scaramucci's SkyBridge Capital before FTX collapsed. Now Scaramucci says that he's confident he'll be able to buy that stake back. Given new facts, he also alleges SBF committed fraud pic.twitter.com/jxltXdjCKW
— Arjun Kharpal (@ArjunKharpal) January 13, 2023

The CEO’s comments provide a stark contrast to his previous statements to CNBC from November, in which Scaramucci refused to use the “fraud” word due to its legal ramifications, and urged “Sam and his family to tell the truth to their investors, get to the bottom” of the whole debacle.

According to SkyBridge’s website, it had $2.2 billion worth of assets under management as of Sept. 30, 2022, with roughly $800 million of the figure comprised of digital-asset-related investments.

Galaxy CEO looking for a smackdown

Galaxy Digital CEO Mike Novogratz says there is a side of him that would like to punch both SBF and Digital Currency Group CEO Barry Silbert for their reported antics during crypto winter.

In an interview with Bloomberg posted on Jan. 13, Novogratz noted that the FTX ordeal ended up directly costing Galaxy around $77 million. As such he’s not a huge fan of SBF and other alleged misbehavior in the space over the past year.

“The toxic masculine side of me would like to punch them both in the jaw,” he said of SBF and Silbert, before adding specifically on SBF: “You’ve got to be f---ing kidding me. Like, really, you a------?”

Novogratz ultimately admitted that he is still a crypto proponent despite 2022 being such a wild year for the industry.

He did note however, that he wished he had taken more capital off the table earlier in 2022 before FTX and even the Terra/LUNA ecosystem went bust. Still, he says he managed to get more than $1 billion out before that year began.

It’ll be OK: DCG crisis likely won’t ‘include a lot of selling’ — Novogratz

January 11, 2023 Coin Telegraph

Bankruptcy

Digital Currency Group’s ongoing financial distress isn’t likely to cause much further strain on crypto prices, according to Galaxy Digital Holdings CEO Mike Novogratz.

Galaxy Digital Holdings CEO Mike Novogratz has hosed down fears over the crisis facing Digital Currency Group (DCG) and Genesis, saying while it’s “not good news,” it won’t “include a lot of selling.”

In a Jan. 10 interview on CNBC’s Squawk Box, Novogratz said he expects the current debacle facing DCG and its related companies to “play out” over the next quarter.

"The outlook for #crypto is not horrible but it's not great. We've got regulatory headwinds we didn't have before. People are going to cut costs and survive this transition period," says @novogratz. "Crypto is not going away. It's a pretty clean market right now." pic.twitter.com/k57ITlRFOV
— Squawk Box (@SquawkCNBC) January 10, 2023

“There are still some overhangs — DCG and Genesis and Gemini — that will play out in the next quarter. That’s not going to be great,” said Novogratz, adding:

“I don’t think it will include a lot of selling, it’s just not good news.”

DCG is a major crypto conglomerate known as the owner and operator of Grayscale Investments, the world’s biggest digital asset manager.

It also owns institutional lending company Genesis, advisory company Foundry, crypto exchange Luno and crypto media company CoinDesk.

Novogratz’s opinion is in stark contrast to a Jan. 4 report from Arcane Research warning investors to pay attention to the “ongoing financial distress” at DCG as the outcome “could severely impact crypto markets.”

It argued if DCG were to enter bankruptcy the company could be forced to liquidate assets and sell sizeable positions in its Grayscale Bitcoin Trust (GBTC) and other crypto-related trusts, which would put pressure on crypto prices.

Investors should pay attention to the ongoing financial distress related to Digital Currency Group (DCG) as the outcome could severely impact crypto markets.

Read more:https://t.co/5syXBpEw7q
— Arcane Research (@ArcaneResearch) January 4, 2023

However, Novogratz argued that both Bitcoin (BTC) and Ether (ETH) have held “pretty steady” despite “a lot of bad news” over the last few months and have even seen an uptick over the last few days.

“It’s a pretty clean market right now,” said Novogratz, referring to investors who have sold or reduced leverage in recent months.

Alarm bells first began ringing for DCG and Genesis late last year, after Genesis halted withdrawals on Nov. 16 citing “unprecedented market turmoil” caused by the collapse of FTX and Three Arrows Capital.

In an open letter directed to DCG CEO Barry Silbert on Jan. 2, Gemini co-founder Cameron Winklevoss alleged that DCG-owned Genesis was yet to pay back a $900 million loan it owes to Gemini, which was due to DCG owing Genesis $1.675 billion.

On Jan. 10, Winklevoss penned a second letter, this time toward DCG’s board of directors, claiming Silbert and DCG only “pretended” to fill a $1.2 billion hole in the Genesis balance sheet. He said Silbert was “unfit” to run the company and called for his removal, effective immediately.

Earn Update: An Open Letter to the Board of @DCGco pic.twitter.com/eakuFjDZR2
— Cameron Winklevoss (@cameron) January 10, 2023

Coinbase layoff was ‘the right thing’

The Galaxy CEO also commented on Coinbase CEO Brian Armstrong’s recent decision to cut another 20% of its workforce in a bid to further reduce operating costs.

Last year “was a grand washout for growth stocks and for crypto, and so anything associated with it [...] that had big costs and revenue shrinking — got hammered,” said Novogratz.

“I think CEOs [including] Brian at Coinbase, and any rational CEO, is doing the right thing.”

Novogratz said the outlook for crypto isn’t horrible, but it’s also “not great.”

“We’ve got regulatory headwinds that we didn’t have before. We’ve got time to heal and rebuild narrative and so people are going to cut costs and survive this transition period,” he said, adding: