Galaxy Digital posts $176m loss amid cryptocurrency market correction

Galaxy Digital posts $176m loss amid cryptocurrency market correction

Galaxy Digital Holdings reported a cumulative loss of $175.8 million for the second quarter of 2021, compared to a cumulative profit of $35.3 million for the same period last year.

The figure includes net income and unrealised gains.

The company attributed the result to a 34% drop in crypto market capitalisation, including a 41% drop in bitcoin.

Galaxy Digital reported total revenue of $860.2 million for the first quarter of 2021.

Assets under management grew 12% between April and June, crossing the $1.6 billion mark. Trading volume in affiliate schemes increased 90% over the quarter and 560% over the year. Galaxy Digital invested $52m in 14 NFT-linked startups.

"Amid significant volatility, our core businesses - marketmaking, deal execution and strategic investments in startups - delivered another quarter of rapid growth in line with the pace of the industry," said Galaxy Digital CEO Mike Novogratz.

At a subsequent press conference, the founder cited the partnership with Goldman Sachs, growth in trading in partnership schemes, strategic investment and hiring (+45% for the second quarter) as drivers of further business growth.

Former BlackRock managing company chief operating officer Jennifer Lee, as well as former Swiss stock exchange CEO Tim Grant, joined the company in the last reporting period.

"It is important to bear in mind that the long-term perspective of digital adoption is much more important than the business we are building," Novogratz explained.

As a reminder, Galaxy Digital applied in August to launch a bitcoin futures ETF under the provisions of the Investment Company Act 1940.

In May, the firm acquired asset manager Vision Hill Group, on the basis of which it created a $34 million crypto fund, with Franklin Templeton as one of its investors.

In the same month, Galaxy Digital agreed to buy custodial services provider BitGo for $1.2 billion.

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