(Bloomberg) -- Michael Novogratz doesn’t want to build the Goldman Sachs of crypto anymore. His new vision for Galaxy Investment Partners: the Drexel of crypto.
And by Drexel he really does mean Drexel Burnham Lambert, the investment bank that almost single-handedly created the junk-bond market in the 1980s -- and infamous for collapsing in one of the greatest insider-trading scandals.
"I was originally saying we were going to build the Goldman Sachs of this space," Novogratz said Tuesday at the Bloomberg Invest conference in New York. "Now, and I know this is going to get me in trouble, but it’s actually more like Drexel. If you think about what Mike Milken and his guys did, they helped credentialize junk bonds, high yield as an asset class. They were the proselytizers, the traders, the bankers."
Novogratz is working on turning his Galaxy Digital LP into what he’s called an institutional-quality merchant banking business in cryptocurrency and blockchain. Galaxy plans to be active in trading, principal investing, asset management and advisory work.
The billionaire investor said he thinks one day institutions will be ready to approach the digital currency business. Novogratz partnered with the parent company of this news organization on the Bloomberg Galaxy Crypto Index, which tracks the performance of the largest cryptocurrencies. The development of indexes can precede big flows into an asset class, he said.
The transition to broader acceptance of digital currencies will take time, Novogratz said. While he sees potential for digital tokens to disrupt big technology companies like Uber through decentralization, he said that that’s still three or four years way. While many blockchains proliferate, he said many will die out -- and Ethereum, EOS and Telegram are the ones to watch right now.
In January, Novogratz laid out a plan to raise C$250 million ($193 million) and, through a holding company, list Galaxy shares on Canada’s junior stock exchange.
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