The Gloomy Financials of Galaxy Digital Holdings
Loss Suffered by Galaxy Digital to the Tune of $295 Million Prior to Nasdaq US Listing in First Quarter
Galaxy Digital Holdings has reported a dismal net loss of $295 million in Q1 2025. This disappointment unfolded during a somber period in the cryptocurrency market. The company revealed these unfortunate figures before U.S. markets opened on Tuesday.
Starting a new chapter in its journey, Galaxy will soon list its shares on the Nasdaq, following a comprehensive reorganization that was approved last month by the U.S. Securities and Exchange Commission. Despite the lull in the crypto market, the company managed to secure $12.9 billion in revenue, an impressive 38% increase from Q4 2024.
It's worth mentioning that Galaxy reported a loss per share of $0.86, a drastic decrease from the $388 million they booked in the previous quarter. To dig deeper into the reasons behind these disappointing numbers, we reached out to Galaxy Digital for additional comment.
According to the company's statement, they had $1.9 billion in equity capital and $1.07 billion in cash and net stablecoins as of March 31.
The disappointing financial results are not surprising given the market's current state. As digital asset investors have shifted their focus to gold and other risk-averse assets during Q1 2025, there was a run of geopolitical uncertainty across several markets. Crypto prices took a hit, remaining around $80,000 in March, after investors pulled out due to billions in losses from meme coins linked to public figures such as Donald Trump and Javier Milei. (Crypto prices have since bounced back, with Bitcoin trading near $104,200, only 4% shy of its all-time high.)
One silver lining in all this is Galaxy's growing partnership with cloud-computing startup CoreWeave. The company is on a mission to bolster IT loads for CoreWeave's AI and high-performance compute operations at their Helios data center campus. This partnership might receive a boost from shareholders' decision to redeem Galaxy in the U.S., allowing it to tap the U.S.'s favorable regulatory landscape for technology firms and investors.
Galaxy's shares will go live on the Nasdaq on May 16. Curious about how the stock is doing on the Toronto Stock Exchange? It's currently trading at $27.32 CAD, experiencing a 3% decline in the last day but enjoying a 117% surge in the past year.
(1) Overall depreciation of digital asset prices constricted client trading activity, affecting revenue generation across Galaxy’s business segments.(2) The Digital Assets segment saw a notable decrease in adjusted gross profit due to falling digital asset prices and reduced trading activity, while the Asset Management & Infrastructure Solutions segment experienced a smaller dip due to lower asset prices and reduced on-chain activity.(3) The Treasury & Corporate segment suffered an operating loss mainly due to digital asset price depreciation, plus a one-time impairment charge and disposal costs from winding down mining operations at Helios.(4) Total assets on platform declined by approximately 29% to $6.997 billion, with ETFs down 25% and assets under stake decreasing by about 45%, signaling weak market conditions and investor caution.
Modified by James Rubin and Andrew Hayward
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(4) The shift in investor focus from digital assets to more secure options, such as gold, may have impacted Galaxy's ico offerings and affected its ability to raise funds during Q1 2025.
(5) Despite the current gloomy financial situation, the innovative technology used in blockchain and cryptography within the crypto industry might offer significant growth opportunities for Galaxy in the long run, especially with its expanding partnership with CoreWeave.
