Bitcoin king Mike Novogratz invests in crypto lender

Michael
Novogratz, President of Fortress Investment Group, speaks at the
annual Skybridge Alternatives Conference (SALT) in Las Vegas
Thomson Reuters

• Mike Novogratz has led a $52.5 million fundraise for
  crypto-lending startup BlockFi, the company announced
  Tuesday. 
• The firm will use the funds to expand its lending
  platform outside the US and to support more digital
  assets. 
• BlockFi allows crypto investors to borrow against their
  holdings. 

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Mike Novogratz’s merchant bank Galaxy Digital has led a $52.5
million fundraising round for crypto-lending startup BlockFi, the
firm announced on Tuesday. 

The New York-based firm offers corporate and retail clients loans
on their crypto holdings, with a loan book in the millions.

Founded by former Cognical senior vice president Zac Prince, the
firm has raised money in two rounds this year. In February, it
raised $1.55 million from ConsenSys Ventures, SoFi,
and Kenetic Capital,
as CoinDesk previously reported.

The most recent round comes as BlockFi eyes expansion in
new states and international markets, and the addition of new
products. It is also looking to support more
cryptocurrencies.

Potential new business opportunities are in fixed-income
and debt investments, as well as lines of credit and a credit
card, Prince told Business Insider. 

To that end, the firm has brought on former Bank of America
managing director Rene van Kesteren, who ran a
seven-person equity-structured financing business before joining
BlockFi in May. 

Currently, BlockFi allows investors to take out a loan as
high as $10 million using either bitcoin or ethereum as
collateral. That lets investors retain ownership of their crypto
and not miss out on the next potential price surge, but also have
cash on hand to pay employees or go on a vacation, for
instance.

This marks the most recent investment for Novogratz’s
Galaxy, which has been pouring money into crypto firms at a fast
clip. In June, Galaxy invested $35 million into virtual-reality
firm High Fidelity, and
$15 million in AlphaPoint, a New York firm building out a
platform for tokenized assets. 

As Business Insider previously reported, Galaxy, which has
businesses in asset-management, trading, and investing, has made
a significant number of investments in the market for digital
coins which have not yet been disclosed publicly.

People familiar with the firm’s operation said the
principal-investment team has purchased stakes in high-volume
initial coin offering projects and has a significant portfolio of
early stage ventures.

Novogratz notably made $250 million from cryptocurrency ether and
now holds 10% of his entire net worth in digital assets. 

As for BlockFi, Novogratz said: “A robust lending market is the
keystone for financial systems and BlockFi’s institutional
approach and deep lending expertise were key drivers in our
decision to partner with them.”