Galaxy Digital Reports Net Loss in Q2
Galaxy Digital, the crypto-focused financial services firm led by Mike Novogratz, reported a net loss of $46 million in the second quarter. The company’s operating businesses performed well despite ongoing uncertainty and regulatory pressure. However, the trading business saw a 54% decline in revenues due to low liquidity and regulatory uncertainty. On the bright side, Galaxy reported an increase in the number of onboarded counterparties, indicating growing interest in the crypto market. Clients are also shifting towards more complex derivatives structures and engaging bilaterally rather than through exchanges.
Key Points:
– Galaxy Digital reported a net loss of $46 million in Q2.
– The trading business experienced a 54% decline in revenues.
– The number of onboarded counterparties increased, indicating growing interest in the crypto market.
– Clients are shifting towards bilateral engagement and complex derivatives structures.
– Galaxy’s lending business saw a decline in loan originations, but its loan book remains substantial.
Mining and Asset Management Show Positive Results
Galaxy Digital’s mining business saw a boost in revenue, thanks to higher income from proprietary mining activities. The firm’s average cost to mine a bitcoin is between $9,000 and $10,000, resulting in a healthy direct margin. Additionally, the asset management unit experienced a significant surge in revenue, largely driven by gains on its venture side and inflows into its funds. Galaxy is actively pursuing partnerships with traditional asset managers in Europe and the US to expand its offerings.
Hot Take
Despite the net loss in Q2, Galaxy Digital’s performance in different business segments provides a mixed outlook for the crypto industry. While trading revenues declined, the increase in onboarded counterparties and the shift towards bilateral engagement indicate growing interest and adoption of digital assets. The mining and asset management businesses showed positive results, highlighting the potential for profitability in these areas. Overall, Galaxy Digital’s performance reflects the evolving needs and gradual institutional adoption of cryptocurrencies.
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