Bankrupt Crypto Exchange FTX Seeks Galaxy’s Expertise To Manage Holdings
In a calculated move, the bankrupt cryptocurrency exchange FTX has hired Galaxy, the advising division of Mike Novogratz’s company, to help it with its selling, staking, and hedging activities. The partnership intends to support FTX’s initiatives to reduce market volatility-related risks while maximizing returns on its Bitcoin holdings.
FTX Seeks Galaxy Digital’s Expertise
FTX, which is now bankrupt, is entering uncharted territory by enlisting Galaxy’s consulting skills. This partnership plans to use hedging techniques for its sizeable holdings of Bitcoin and Ethereum to reduce FTX’s vulnerability to price volatility. The strategic hedging will protect against unfavorable price changes, creating a safer environment for the sale of these assets in the future.
FTX will also be able to “stake” its cryptocurrency holdings, which is the practice of lending digital assets to verify blockchain transactions, as a result of its relationship with Galaxy. This technique not only benefits the blockchain network but also piques people’s interest, potentially opening up new revenue streams.
Galaxy’s broad experience in managing and trading digital assets qualifies it as an appropriate advisor for FTX’s demanding needs. The decision is supported by Galaxy Digital’s financial stake in FTX, which has disclosed stakes in the tens of millions of dollars.
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Rising Influence Of Galaxy Digital
Galaxy Digital’s power in the cryptocurrency industry is growing more and more obvious as a result of the $21 million worth of Ethereum it has acquired from various sources over the past month. Notably, recent transactions involving organizations like ParaFi and Coinbase demonstrate Galaxy Digital’s active participation in financial activities related to cryptocurrencies.
The cryptocurrency industry is intently watching how FTX and Galaxy’s partnership develops because it may have an impact on how to manage and profit from cryptocurrency holdings in the face of market uncertainty.
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