Michael Novogratz is the first cryptocurrency billionaire from Wall Street

13.05.2022 | auglovoi

Michael Novogratz was one of the first billionaires from the Forbes list to believe in the prospect of bitcoin and cryptocurrencies in general. Before the global financial crisis of 2008, he managed to get on the list of the richest people on the planet thanks to his projects. In addition to asset management of the Fortress investment fund, which was one of the largest in the world, Novogratz was a partner of Goldman Sachs. But the crisis has shifted him from the position of one of the richest. And so it went on until he gained special popularity in 2013, eventually receiving the title of “king of bitcoin”, albeit for a relatively short time.

The first prediction and the first purchase

Back in early 2010, Michael Novogratz turned his attention to the prospects of bitcoin, although most experts at that time openly laughed at the use of distributed ledger technology in the financial sector. However, in 2013, when the first cryptocurrency was worth about $ 100, the billionaire predicted its rapid growth. And, as it turned out, he did not lose — by the end of the year, the price had increased tenfold. Although that peak did not last for a long time, Novogratz received the title of “king of bitcoin” among cryptocurrencies.

Around the same time, the manager starts investing in digital gold with the money of the Fortress fund. Although this decision brought enough profit over the next two years, the investment fund was not allowed to show profit in other areas of investment, in particular in emerging markets. After that, when two years turned out to be negative for Fortress, Michael left the position of manager and founded his own company. From the very start, his company invested several percent in bitcoin, which was simply an astronomical amount for investors of that time — no one wanted to take risks on an untested asset and rarely invested more than a thousandth of a percent of managed capital in digital gold.

Novogratz`s Rise in the Cryptocurrency World

It is with the foundation of your own investment company that you can start the countdown of Michael’s formation in the world of cryptocurrencies. After buying digital gold, Novogratz became interested in other assets. Shortly before the beginning of 2016, Novogratz met with his friend and his colleagues in Brooklyn, where he was offered a share in a startup, and the billionaire, succumbing to intuition, thought about acquiring part of the undertaking.

However, this decision was not destined to come true. A fairly short time after the meeting in Brooklyn, Novogratz had a conversation with Vitaly Butorin. The latter was able to convince Michael of the prospects of his project, and he acquired a little-known asset at that time worth half a million at a price below one dollar. And in this case, Novogratz did not lose again, just two years later Ethereum jumped to $ 400, which brought a profit of about $ 100 million. In general, since the beginning of the foundation of his own company, Michael has managed to earn more than a quarter of a billion on cryptocurrencies, which has become an unprecedented indicator for Wall Street. By that time, only the founders of cryptocurrency projects themselves could boast of similar incomes in such a short time.

Own cryptocurrency hedge fund

It was cryptocurrencies that allowed Michael Novogratz to return to the list of dollar billionaires. Although Michael himself repeatedly called cryptocurrencies a bubble and predicted their imminent collapse, as the dotcom market collapsed at the time. Anyway this did not stop him from creating his own investment fund, whose activities would be aimed only at investing in cryptocurrencies, Galaxy Investment Partners.

At that time, according to the statements of Novogratz himself, up to 20% of his own funds were in bitcoin and Ethereum, which at that time was equivalent to a quarter of a billion dollars. At the same time, according to the billionaire’s idea, his new fund was supposed to manage $ 500 million, of which 150 million of its own funds, and the remaining 350 million was planned to be attracted from outside investors.

And Novogratz succeeded. However, the first year of the fund’s operation turned out to be extremely unprofitable. Losses amounted to about 130 million, but this did not scare off investors. 2018 has become a black time for the crypto industry, but at this time Michael manages to attract about a hundred million dollars more for the development of a cryptocurrency startup.

Initially, it was planned that Galaxy Investment Partners would invest in cryptocurrencies at various stages of formation, including during the IPO, but later the plans changed. Now Novogratz is creating separate hedge funds for each asset, allowing investors to invest in the instrument that they need.

In fact, as at the time of its foundation, Galaxy Digital remains the only cryptocurrency hedge fund with absolutely transparent reporting and investment structure. As well as from personal investments, Novogratz pays all taxes and allows you to receive one of the highest levels of reliability.

Conclusion

Undoubtedly, Mike Novogratz has become one of the conductors of bitcoin and other cryptocurrencies into the world of big capital. Although at first he considered digital gold to be another bubble, and used it only for quick enrichment, but after only a couple of years Mike understood the whole deep meaning of digital assets, and most importantly, he understood the technological component. Now he himself tells investors that bitcoin is not only about finance, but also a whole philosophy of building a new world.