Novogratz's Galaxy Digital Leads $36 Million Republic Investment - Bloomberg | Canada News Media
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Novogratz's Galaxy Digital Leads $36 Million Republic Investment – Bloomberg

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Republic, whose more than 1 million users make it the largest private investment platform, raised $36 million from investors including Michael Novogratz’s Galaxy Digital, Broadhaven Ventures and Prosus NV.

New York-based Republic allows so-called non-accredited investors a chance to get in on the startup ground floor with as little as $10, and has grown by four times in the past year based on investment through its platform. The money raised in this round will help Republic build a system for its small investors to sell their stakes sooner than the eight to 10 years it usually takes for startups to return money, Chief Executive Officer Kendrick Nguyen said in an interview.

Unlike the larger capital markets that ground to a halt for a time because of the Covid-19 pandemic, “the demand on retail capital has been available throughout,” Nguyen said. “Month-on-month it has continued to grow and I think it highlights the power of retail capital.”

Read more: Crypto Push by Republic Investment Platform Sparked by New Token

Republic offered a digital token in July through a pre-sale to give customers access to profit from some deals done on its platform and the token has not yet been issued or released, according to the company. Only accredited investors are able to buy those tokens and the firm is still working with the Securities and Exchange Commission to allow non-accredited investors to buy in.

The SEC requires accredited investors to meet conditions such as having a net worth of at least $1 million and an annual income of at least $200,000. Republic has offered crypto-related investments since 2017 with Nguyen pushing to bring digital currencies and blockchain projects to more people than the enthusiasts they cater to today.

Novogratz, 56, is the founder, CEO and chairman of Galaxy Digital, which was the lead investor in Republic this round. Prosus, the Internet-services company controlled by Naspers Ltd., made a strategic investment in Republic by buying the digital tokens that are known as Republic Notes, according to the firm. Naspers owns around 30% of Tencent Holdings Ltd., the Chinese creator of the messaging platform WeChat.

Nguyen said that raising capital in the public markets is in the cards for Republic, whether that’s through an initial public offering, blank-check firm or a direct listing.

“We certainly will consider and look closely at the public markets,” he said.

(Company corrects details of token in fourth paragraph.)

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    Economy

    S&P/TSX composite down more than 200 points, U.S. stock markets also fall

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    TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

    The S&P/TSX composite index was down 239.24 points at 22,749.04.

    In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

    The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

    The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

    The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

    This report by The Canadian Press was first published Sept. 6, 2024.

    Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

    The Canadian Press. All rights reserved.

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    Economy

    S&P/TSX composite up more than 150 points, U.S. stock markets also higher

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    TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

    The S&P/TSX composite index was up 171.41 points at 23,298.39.

    In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

    The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

    The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

    The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

    This report by The Canadian Press was first published Aug. 29, 2024.

    Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

    The Canadian Press. All rights reserved.

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    Investment

    Crypto Market Bloodbath Amid Broader Economic Concerns

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    The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

    The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

    Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

    The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

    Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

    Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

    Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

    Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

    The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.

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