Article by Kate Rooney Forbes

Another Goldman exec dumps Wall Street for crypto world

  • Early cryptocurrency investor Mike Novogratz hired Richard Kim from Goldman Sachs as the new COO of his crypto merchant bank Galaxy Digital, says a person familiar with the matter.
  • Kim is the latest of a handful of Goldman Sachs executives to leave Wall Street for crypto start-ups.
  • Bitcoin’s march to near $20,000 last year has attracted Wall Street traders and hedge funds to the space.

Early cryptocurrency investor Mike Novogratz has hired Goldman Sachs executive Richard Kim as the new chief operating officer for his merchant bank, Galaxy Digital, according to a person familiar with the matter.

Kim, whose LinkedIn profile says he was an executive director based in the bank’s London office, joins Luka Jankovic, a former Goldman Sachs hedge-fund analyst, among the bank’s alumni now at Galaxy Digital.

Kim’s exit, first reported by Bloomberg News, is among a handful of high-profile transitions from Goldman Sachs to cryptocurrency start-ups.

BlockTower Capital recruited former Goldman executive Michael Bucella in January. Former Goldman vice president Matt Goetz founded BlockTower last year.

James Radecki was a managing director at the bank and left in 2016 to work in strategic investing at another cryptocurrency firm, according to his LinkedIn page. He’s now global head of business development at Cumberland Mining, one of the largest traders of cryptocurrencies.

A Galaxy spokesperson declined to comment on the hiring. Novogratz, who worked at Goldman Sachs during the 1990s, told reporters at The New Yorker that the firm “hired Goldman’s best guy in blockchain,” in an April issue. It’s unclear whether he was referring to Kim or another executive.

Early cryptocurrency investor Mike Novogratz has hired Goldman Sachs executive Richard Kim as the new chief operating officer for his merchant bank, Galaxy Digital, according to a person familiar with the matter.

Kim, whose LinkedIn profile says he was an executive director based in the bank’s London office, joins Luka Jankovic, a former Goldman Sachs hedge-fund analyst, among the bank’s alumni now at Galaxy Digital.

Kim’s exit, first reported by Bloomberg News, is among a handful of high-profile transitions from Goldman Sachs to cryptocurrency start-ups.

BlockTower Capital recruited former Goldman executive Michael Bucella in January. Former Goldman vice president Matt Goetz founded BlockTower last year.

James Radecki was a managing director at the bank and left in 2016 to work in strategic investing at another cryptocurrency firm, according to his LinkedIn page. He’s now global head of business development at Cumberland Mining, one of the largest traders of cryptocurrencies.

A Galaxy spokesperson declined to comment on the hiring. Novogratz, who worked at Goldman Sachs during the 1990s, told reporters at The New Yorker that the firm “hired Goldman’s best guy in blockchain,” in an April issue. It’s unclear whether he was referring to Kim or another executive.

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Bitcoin’s rise to almost $20,000 in December has attracted other Wall Street traders and a surge of new hedge funds in the space. The number of crypto funds rose to 245 this year, up from 167 last year and only 19 firms in 2016, according to the latest numbers from research firm Autonomous Next.

Galaxy Digital manages assets for blockchain-related ventures, including cryptocurrency.

Novogratz, who left Fortress Investment Group in 2015 after the fund lost money, told CNBC in November that bitcoin could multiply more than four times by the end of this year.

“Bitcoin could be at $40,000 at the end of 2018. It easily could,” Michael Novogratz said on CNBC’s “Fast Money.” “Ethereum, which I think just touched $500 or is getting close, could be triple where it is as well.”

Bitcoin’s price has fallen more than 52 percent this year, after starting 2018 above $14,000, according to CoinDesk. The entire cryptocurrency market has lost more than half its market capitalization since the beginning of this year, according to data from CoinMarketCap.

In December, Novogratz announced he would delay plans to launch what would have been the largest digital currency fund on record.

“We were supposed to launch on Dec. 15, and we paused,” Novogratz told CNBC late last year. “I didn’t like the market conditions as a starting point to take other investors’ money.”

“We are still feverishly building out a full merchant bank for crypto, i.e., I am still very bullish on the space,” he said.

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While so many of the hedge funds that opened doors in the second half of 2017 were crushed, those that exercised caution while many carelessly entered the space may very well present investors with an incredible buying opportunity.

The general consensus from the experts- at least the ones that called the sharp drop in Bitcoin prices (and took a lot of flack for suggesting the digital currency could drop 50% or better when it was trading near all time highs) are now calling for the next bull run to resume possibly in the 2nd quarter this year.

Cryptocurrencies could go on a bull run greater than last year and pass the trillion-dollar mark in terms of value, experts told CNBC

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