How did Galaxy Digital Lose $554.7 in One Quarter?

How did Galaxy Digital Lose $554.7 in One Quarter?

Galaxy Digital recorded a loss of $554.7 million in Q2 this year. Galaxy Digital is a technology-driven financial service and investment company specializing in cryptocurrencies and digital assets. The reports show that the company lost $182.9 million in the same quarter last year.


The company explained the decline in Q2 by referring to the hidden losses on digital assets and investments in trading and main investments due to decreasing digital asset values, which are somewhat offset by profitability in the mining sector. However, the firm claimed on behalf of Galaxy Digital Mining (GDM) that the exclusive mining activities continued to produce bitcoin at a marginal cost much below fair market value.

Will the Sink Continue?

Galaxy reported having $1 billion in cash and a net digital asset position of $474.3 million, with $256.2 million of that amount being held in non-algorithmic stablecoins. The company’s subsidiary, Galaxy Digital Asset Management (GDAM), also introduced the Galaxy Liquid Alpha Fund in Q2 using internal capital and a benchmark of the Bloomberg Galaxy Bitcoin index. According to the firm, the fund tries to combine macro, quantitative, and fundamental analysis to discover major secular winners within the nascent crypto asset class.


But Galaxy Digital’s founder and CEO, Michael Novogratz stated that he is happy with Galaxy’s outperformance throughout a difficult macroeconomic and market climate. They were able to keep over $1.5 billion in liquidity, including over $1 billion in cash, thanks to prudent risk management and their dedication to strict credit standards.


On the plus side, Galaxy’s operational business lines in investment banking and mining were successful overall in Q2. They contributed $1.1 million to net comprehensive income. Additionally, the business earned $10.9 million in sales from the mining sector, which increased Galaxy’s net comprehensive income by 204% from the same time last year. On the other hand, The business is prepared to weather extended turbulence and seize strategic opportunities sustainably.