Galaxy Digital Holdings, the crypto financial services and investment management firm led by Bitcoin bull Mike Novogratz, announced on Friday the acquisition of two cryptocurrency trading companies: Drawbridge Lending and Blue Fire Capital. The moves are aimed at positioning the firm to meet what Novogratz described as a “bigger wave of institutional demand” for Bitcoin.
Institutional Demand Wave Incoming
During Galaxy Digital’s Q3 2020 earnings call on Friday, Novogratz emphasized that the COVID-19 pandemic has acted as an accelerant for the cryptocurrency business, for Bitcoin, for blockchain, and for everything the company does. “I see an unbelievable opportunity for our company and for the space,” he said. At the time of writing, Bitcoin is trading at approximately $16,250, but Novogratz explained that this price level is not driven by speculative mania. “It’s trading like that because institutions, hedge funds, high net worth individuals, family offices are all moving into Bitcoin,” he elaborated. “They’re moving in as a store of wealth, they’re moving in as an inflation hedge, they’re moving in because it’s become an institutional asset.”
Notably, renowned billionaire investor Bill Miller recently stated that he believes “every major bank, every major investment bank, every major high net worth firm is going to eventually have some exposure to Bitcoin or what’s like it.” Analysts at JPMorgan also noted that some investors who previously invested in gold ETFs, such as family offices, may be looking at Bitcoin as an alternative to gold.
Acquisition Details
Chicago-based Drawbridge Lending is a CFTC-regulated company that provides commercial and individual loans secured by Bitcoin held at a qualified custodian. Blue Fire Capital, also based in Chicago, offers investment brokerage and trading services with a focus on crypto assets. Galaxy Digital, headquartered in New York City, provides trading, asset management, and investment banking services to institutional clients.
“We are looking forward to seamlessly integrating Drawbridge and Blue Fire into Galaxy Digital Trading,” Novogratz said. “This will help further meet what we believe will be an even bigger wave of institutional demand.” He added that institutional investors and corporations are becoming more knowledgeable and comfortable with digital assets, increasingly grasping the purpose and importance of cryptocurrency in their investment strategies.