No love for Mike: Galaxy Digital loses $111 million amid crypto blood bath
Cryptocurrency-focused financial services corporation Galaxy Digital reported a net loss of $111.7 million for the quarter ended March 31, 2022.
Galaxy takes a digital hit
In the first quarter of 2022, Galaxy Digital, a cryptocurrency investment firm led by billionaire Michael Novogratz, reported a loss of $111.7 million. The loss is a significant drop from last year’s $858.2 million profit.
The above net loss, as detailed in the company’s quarterly financial report for the months January to March 2022, was mostly due to the ongoing volatility of the cryptocurrency market. As stated in the report of the firm.
The following are excerpts from the report:
“The reduction was primarily related to unrealized losses on digital assets and on investments in our business and key investment businesses, partially offset by profitability and lower operating expenses in our investment banking and mining businesses.”
Galaxy Digital Asset Management (GDAM), the firm’s asset management division, reported $2.7 billion in assets under management, $2 billion in Galaxy Fund Management products and $735 million in Galaxy Interactive Fund. That’s more than double the $1.27 billion recorded a year ago, but represents a 5% decrease from Q4 2021.
In addition, mining and investment banking both grew by 775 per cent and 433 per cent, respectively. The firm’s partners invested $2.6 billion in capital, but it declined 3% as the net long digital position suffered significant losses. In the first quarter, Partners Capital closed at $2.5 billion, up from $1.7 billion in 2021.
According to the firm, most of the losses were due to a 7% drop in the cryptocurrency market in the first quarter.
BTC/USD has fallen to its lowest level since the start of the year. Source: TradingView
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Michael Novogratz won’t be surprised by the market
During Galaxy’s earnings call on Monday, CEO Michael Novogratz mentioned a slowdown in the crypto and equity markets, but said he is “not panicked by any stretch.” He also mentioned that “crypto as a tech game” is gaining traction, as evidenced by his recent investor meetings.
Even though bitcoin is down more than 50% from its record high hit in November, he remains confident about the crypto’s long-term prospects due to the pace of institutional adoption. He cited BlackRock Inc., Blackstone Inc., Citadel and Apollo Global Management Inc. as examples of new institutional investors who are “coming in with a very long-term focus.”
He is quoted as saying:
“Galaxy posted another strong quarter against a backdrop of declining digital asset prices, and I am proud to see the sustainability and continued profitability of our operational business lines, including record contributions from our investment banking and mining sectors.”
He says the company will continue to invest in the development of its digital financial services.
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Featured image from Pixabay, chart from TradingView
