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Startup Producing Crypto Exchanges for Illiquid Assets Receives $15M Investment From Mike Novogratz

Last Updated March 4, 2021 5:09 PM
David Hundeyin
Last Updated March 4, 2021 5:09 PM

Blockchain startup AlphaPoint is set to receive an investment of $15 million from Galaxy Digital Ventures, the company owned by prominent hedge fund trader and bitcoin enthusiast Mike Novogratz as he maintains his bullish outlook on the cryptocurrency market.

Based in New York, AlphaPoint offers its clients an easy route to issuing their assets on a blockchain using technology that underpins crypto exchanges. In so doing, illiquid assets like gold and real estate can be traded in a seamless manner mirroring that of cryptocurrencies on an exchange.

Crypto-Optimism and the 49er Model

Famed for making and losing billions of dollars as a trader at Fortress Investment Group, Novogratz has reinvented himself as a successful crypto enthusiast with a number of bullish bets on the future of cryptocurrencies. Following the famous San Francisco 49er model of market entry, Novogratz has created a successful strategy of selling proverbial shovels and headpans to investors looking for a piece of the action in the ongoing cryptocurrency gold rush.

One of his more recent predictions is that the cryptocurrency market will eventually achieve a valuation in excess of $20 trillion, and this investment would seem to indicate that he intends to continue putting his money where his mouth is.

Valued by Forbes at between $700 million and $ 1 billion in January 2018, Novogratz has been busy building out his spades-and-picks strategy over the past few months. Galaxy Digital Capital Management LP, his investment company recently partnered with Bloomberg to launch the Bloomberg Galaxy Crypto Index (BGCI) which tracks crypto market movements.

In his view, AlphaPoint represents a part of a larger trend toward enabling many different asset classes to come to market through the framework of crypto asset exchanges, potentially disrupting the entire global financial trading system. Describing this process he said:

“We are in the early stages of a fundamental transformation in financial markets due to the digitization of assets. This transformation started with currencies but is now changing the way we look at commodities, real estate, art, and other traditional and emerging asset classes.”

AlphaPoint estimates the value of the illiquid assets market at more than $11 trillion, which substantially dwarfs the current $287 billion valuation of the crypto market. Leveraging AlphaPoint’s technology to disrupt the vast market for trading illiquid assets is likely to be at the top of his agenda.

Growing Clientele List

AlphaPoint already boasts an impressive client roster including commodities giant CME Group, private equity real estate investment firm Muirfield Investment Partners,.and the Royal Mint of England for whom it runs a gold bullion trading platform.

Cofounder and CEO Salil Donde shares Novogratz’s vision regarding the future of asset trading. Speaking to Forbes he said:

“We believe the next wave of capital formation and societal wealth creation is going to come from the digitization and trading of illiquid assets.”

Using the funds from Novogratz’s investment, the company plans to expand its operations into other illiquid assets that have proven difficult to trade in the past, and it also plans to increase its team strength to double the current number by the end of 2018. The deal will also see Galaxy Digital Ventures managing director Greg Wasserman joining the AlphaPoint board of directors.

Featured image from YouTube/Bloomberg.