May 27, 2023

Dangerous bet on shitcoins - ICO fund Mike Novograts lost 83% of the cost

Pantera ICO fund, in which Mike Novogratz Galaxy Digital cryptocurrency bank invested, suffers big losses due to Betting on little-known altcoins and tokens.

According to the financial report for the third quarter of 2019, Galaxy Digital invested $ 17.4 million in Pantera ICO, but at the moment, the real value of investments is estimated at less than $ 2.9 million.

Dangerous bet on shitcoins - ICO fund Mike Novograts lost 83% of the cost

Source: Galaxy Digital

The fund has relied on various unknown ICO coins, but the so-called "altcoin season", which many investors have been counting on in recent months, has not come.

At the same time, Galaxy Digital's earlier investments in bitcoin are now valued at $ 106.5 million, increasing the cost primarily due to the rising price of the leading cryptocurrency, the report emphasizes.

Earlier, The Block analyst Larry Chermak found that 89% of ICO projects are unprofitable.

The popularity of this form of raising capital has fallen markedly compared to last year. In the first quarter, ICO projects raised just $ 118 million - 58 times less than in 2018.

Contributing to the drop in investor interest in the sectorcontribution and outright fraud cases, starting from relatively small projects like REcoin ($ 2.8 million) or Eastern Metal Securities ($ 11 million), ending with a $ 2.9 billion scam by OneCoin.

The Scam of the Decade: How the Doctor of Law organized the OneCoin pyramid and went missing with billions of euros

Recall that in August Galaxy Digital increased its investment in the DeFi cryptocurrency lending platform. According to the report, the return on investment was about 80%.