By
Temitope Olatunji
April 26th, 2024
Stifel has reinstated coverage of Michael Novogratz’s crypto financial services firm with a buy rating and potential 45% gains from the current levels.
In their research report on Wednesday, March 13, investment bank Stifel advised that equity investors seeking exposure to the crypto industry should keep Galaxy Digital Holdings Ltd (TSE: GLXY) as the core holding of their portfolio. Galaxy Digital is a merchant banking institution specializing in the digital assets and blockchain technology sector.
Stifel has reinstated coverage of Michael Novogratz’s crypto financial services firm with a buy rating and set a price target of C$20. On Thursday, Galaxy closed 4.7% lower at C$13.11. The GLXY stock is up by 26% since the beginning of 2024, with 208% gains over the last year. In the research report, Stifel analysts Bill Papanastasiou and Suthan Sukumar wrote:
“The company offers an asymmetric return profile with significant principle exposure to bitcoin (BTC) and ether (ETH); a diverse group of revenue-producing businesses across trading, investment banking and asset management; and longer-term outsized growth potential through its infrastructure solutions arms, which focuses on core technologies that power decentralized networks.”
The analysts also added that Galaxy Digital has consistently prioritized institutional clients and implemented strong risk management strategies. Thus it positions itself as one of the few centralized operators to withstand the challenges of previous crypto market downturns.
Stifel highlighted several significant factors driving the company’s growth, including ETF net inflows, advancements in GalaxyOne, and the possibility of a Nasdaq listing.
Mike Novogratz Sets $50,000 Bitcoin Floor Price
Billionaire founder Mike Novogratz of Galaxy Digital expressed optimism about Bitcoin’s future, forecasting a minimum price floor of $50,000 with potential for further growth to $100,000.
In a recent CNBC interview, Novogratz credited Bitcoin’s strong performance to continuous inflows into newly authorized spot Bitcoin ETFs in the US. He asserted that as long as these inflows remain positive, Bitcoin price trajectory is poised to rise.
Novogratz cautioned about a possible correction in case of negative net inflows, underscoring the current market’s resilience and high funding rates. The Bitcoin price is already seeing a pullback of 8% in the last 24 hours currently trading at 467,349 with a market cap of $1.328 trillion.
Nevertheless, he maintained a bullish outlook on Bitcoin’s floor price, estimating it to range between $50,000 and $55,000, barring any unforeseen significant events. Although spot ETFs are swiftly amassing Bitcoin, he anticipates that these funds will not surpass 20% of the total Bitcoin supply.
He attributes this projection to a future equilibrium and the inclination of certain investors to self-custody their coins or opt for overseas custodial services, driven by concerns over the stability of their home countries.