2018-04-14newyorker.com

Novogratz has certainly been making the most of the speculative bubble to rebuild his fortune, but he claims to be invested in the utopian aspects of blockchain as well. He doesn't think that cryptocurrencies will replace the dollar or the yen, but he believes that they will be a boon to countries in the developing world, where people don't have trust in their fiat currencies, and that blockchain can revolutionize the way information is logged and shared and, in our age of data breaches, protected. "I'm good at selling the dream," he said. "I can get onstage and get people to start saying `Hallelujah! Hallelujah!' "

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By the fall [of 2017], Novogratz was a billionaire once more. The price of a single bitcoin had been close to three thousand dollars during the summer; now it was clawing at five thousand. I visited him one Wednesday in October, at his office, walking in past a large statue of Evel Knievel in the lobby--the base reads "Bones heal, pain is temporary and chicks dig scars." Plush sofas were occupied by representatives of the Brown University endowment, a member of the board of Tesla, and the heads of a major publicity firm, among others.

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Two weeks earlier, Novogratz had announced his decision to rejoin the hedge-fund world and launch a cryptocurrency fund with a hundred and fifty million dollars of the money he had personally made on crypto and three hundred and fifty million from outside investors.

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After bitcoin and other currencies soared over the summer and fall, Novogratz presented this stage of crypto as a "speculative mania phase" that would crash like the dot-com bust but then reëmerge with more mature players. Out with AltaVista, in with Google. In Novogratz's estimation, individual cryptocurrencies would fail--although he is bullish on bitcoin and ether retaining their value in the long term. "I don't know if the speculative phase ends in March, ends in a year from now, eighteen months from now," Novogratz told me, "but it will end." He suggested that it will end when "too many people have bought in." (At a dinner during the fall of 2017, one of my favorite Oberlin professors, a Marxist, told me that he had just bought some ether.)

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Novogratz's cryptocurrency hedge fund never launched. In December, after the price of a single bitcoin rocketed to more than nineteen thousand dollars, Novogratz told me that "it would be a different proposition raising a crypto hedge fund today than it was three months ago." He said he was not comfortable running other people's money when the currency was at its peak, and predicted that bitcoin would consolidate at between eight and sixteen thousand dollars. "I'd rather look stupid than be stupid," he added. Right after he told me of his plans to shelve his hedge fund, bitcoin experienced one of its habitual micro-crashes, falling to under fourteen thousand dollars a coin.

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Novogratz had described another idea to me, one several magnitudes more audacious--certainly more institutional, and potentially more durable--than a mere half-a-billion-dollar hedge fund. He wanted to launch a publicly traded merchant bank solely for cryptocurrencies, which, with characteristic immodesty, he described as "the Goldman Sachs of crypto," and was calling Galaxy Digital. "I'm either going to look like a genius or an idiot," he said.

Novogratz announced the bank's launch in early January, the same week that Dimon, of JPMorgan Chase, who is one of the most vocal critics of cryptocurrency, publicly regretted calling bitcoin a fraud ("The blockchain is real," he told Fox Business). Shortly afterward, I sat down with Novogratz in his Tribeca apartment's far-flung kitchen to discuss Galaxy Digital.

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The new entity's launch was not so much an I.P.O. as a complex R.T.O., or reverse takeover, involving a Canadian shell company called Bradmer Pharmaceuticals. Galaxy Digital would still be based in New York, but because Canada offered easier and faster access to the public market Novogratz had decided to launch on the Canadian TSX venture exchange, with plans to eventually transfer to Canada's main exchange. He would contribute around three hundred and fifty million dollars, while raising another two hundred and fifty million dollars.



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