The company owned by Michael Novogratz converts a 316-year-old violin owned by Catherine the Great into a token in order to obtain a loan.

https://markets.businessinsider.com/images/unsortiert/bitcoin-logo-tiles.jpg

The company Galaxy Digital, under the leadership of Mike Novogratz, has created a digital representation of an 18th-century violin to serve as collateral for a loan deal worth millions with Animoca Brands co-founder Yat Siu. According to a press release, this process of tokenization increases the instrument’s marketability and creates possibilities for interested investors.

The violin in question is a 1708 Stradivarius previously owned by Russia’s empress Catherine the Great, purchased at auction by Siu for over $9 million. Galaxy Digital now holds the violin and has created a nonfungible token of the instrument to serve as additional collateral for the loan.

The CEO of Galaxy, Michael Novogratz, conveyed enthusiasm for the future possibilities of tokenizing luxury assets such as violins. He believes that this innovation will transform the way assets are handled, evaluated, and exchanged in the digital marketplace.

Tokenization is a growing trend where real-world assets are converted into tokens for trading on blockchain platforms. The total value of on-chain real-world assets surpassed $118 billion in late 2023, showcasing the increasing popularity of this practice.

Through the process of digitizing assets, the liquidity is heightened, allowing for the division of assets into smaller fractions that can be traded more easily. Siu stated that tokenizing the violin was not essential, but a clever choice to improve liquidity. There is a potential for the fractionalizing of the tokenized instrument for investors in the future.

Galaxy Digital’s choice to provide these loans is intended to draw in a fresh set of customers who can take advantage of the thriving cryptocurrency industry. This step supplements the company’s current loan department and showcases its dedication to creative monetary options.