With Galaxy Digital now working on an educational course for financial advisers, founder Mike Novogratz told CoinDesk he hopes it will help finally kick-start the institutional use of bitcoin, and turn around the asset manager’s fortunes.
Novogratz, a Wall Street veteran, loves a compelling narrative. “Bitcoin specifically is a story about adoption,” he said a few minutes into our call. “And the next big group that’s going to adopt bitcoin as a store of value, as a digital gold, are the financial advisers.”
Earlier this week, Galaxy Digital announced it had partnered with the educational arm of CAIS, a financial product platform that specializes in connecting institutional investors – financial advisers, hedge funds, private equity – to alternative investments and products.
The tie-up will see Galaxy provide educational content about crypto to wealth managers and financial advisors. Although the course will offer material on the broader digital asset space, as well as on the emerging market infrastructure, it will revolve around bitcoin.
It’s a “really sweet partnership,” Novogratz said. Galaxy can make bitcoin’s investment case directly to the strata of society that controls most of the country’s wealth. “CAIS is spectacularly situated to help us educate them and then connect with them to sell our products.”
See also: Galaxy’s Novogratz: XRP Will ‘Underperform Immensely Again This Year’
Indeed, going back to the narrative, Novogratz has long believed institutional involvement was the natural next step for crypto. While it may have started out as a “retail-driven, people’s revolution,” he predicted institutions would always get involved as the asset class grew in size.
Novogratz saw a gap. As a crypto merchant bank, Galaxy offers clients asset management and advisory services; it uses its own capital to trade and invest in the space. It would become the bridge, allowing traditional capital to flow into the nascent crypto space.
While Galaxy got off to a flying start, such as a high-profile investment into Block.one, the bank’s performance over the past two years has been anything but spectacular.
In fact, Galaxy has failed to turn a profit since its launch: it lost a whopping $272.7 million in its first full year of operation. It rode the market rebound in the summer of 2019, but still lost $97 million in Q4 2019. Losses stemming from the its trading arm have wiped out its other revenue streams. A pear-shaped investment into WAX, a gaming token, for example, lost the firm as much as $47 million
In order to keep itself going, Galaxy has been forced to shrink its workforce by 15%. But it may not be out of the woods yet. The bank warned earlier this year that the coronavirus outbreak would likely contribute to a further hit to revenue.
Novogratz is confident, however, that institutions can help turn his company’s…