Galaxy Digital, the cryptocurrency investment and merchant bank established by billionaire Mike Novogratz, has cut 15 percent of its entire staff.
According to a report published earlier this week by CoinDesk, the firm made a move under the radar, initiating the job cuts as early as last month. The news source explained that the cuts were across the board, essentially meaning that the firm was still able to keep all of its divisions operational.
Bitcoin’s Performance Let Galaxy Digital Down
Citing a source who once worked at the firm, CoinDesk explained in its report that Galaxy Digital had gone on a hiring spree with the expectations that the digital asset would achieve a specific level of growth to help it keep costs down. However, given the effects of 2018’s crypto winter and the fact that the market stalled for a bit after rebounding in mid-2019, it would seem that the firm’s bet didn’t quite pay off.
The market has been able to pick up this year as well, with Bitcoin most notably hitting and crossing the $10,000 mark for the first time since September of last year. However, this surge only began towards the middle of January, and as CoinDesk putt it, it would seem that the layoffs happened a bit before that.
The market’s stall also affected the company, as it revealed in its financial report for the third quarter of 2019 that it had made an operating loss of about $68 million. At the time, the company explained to its investors that while the first three quarters of the year were positive on a holistic level, the third quarter in question brought its results down a bit. Over-the-counter trades, one of the major divisions at the company, was pointed out to have accounted for $43.3 million of the company’s total losses.
Looking into 2020
Regardless, the company is still rolling on and gearing up for a stellar 2019. Late last year, Novogratz took to Twitter to share some of his predictions for the year, including an Academy Award for legendary actor Tom Hanks and Bitcoin hitting the $12,000 mark before the year runs out. He already lost the Oscar bet, but given that Bitcoin is currently going for $10,240 (at press time) and the halving isn’t even here yet, there’s a distinct chance that the top asset’s performance could even surpass Novograt’s predictions when all is said and done.
Galaxy Digital is also working on two new investment products. Last November, Novogratz appeared in an interview with Bloomberg where he explained that the funds- dubbed the Galaxy Bitcoin Fund and Galaxy Institutional Bitcoin Fund- would be used to target the “wealth of America”; essentially, people between the ages of 50 and 80 who haven’t done much in crypto investing.
In the interview, he explained that the finds had been established with the firm’s money, as well as a little participation from its key investors. The Galaxy Bitcoin Fund will require a minimum investment of $25,000, and investors will be able to make withdrawals every quarter. On the flip side, the Galaxy Institutional Bitcoin Fund comes with weekly liquidity and a higher barrier for entry.