Galaxy Digital Turns $1.7b Net Income from 2021 to $1b Loss in 2022

<p class="MsoNormal">The publicly-listed cryptocurrency company founded by an American investor Michael Novogratz, Galaxy Digital Holdings (<a href="https://www.financemagnates.com/tag/galaxy-digital-assets-fund/" target="_blank" rel="follow">TSX:GLXY</a>) has published its full-year results for 2022. Galaxy showed a massive net loss due to the prolonged crypto winter dominating the previous year.</p><p>Crypto Winter Hits Galaxy Digital Hard</p><p class="MsoNormal">In Wednesday's press release, Galaxy announced the fourth quarter, the full year and preliminary first quarter-to-date results. The company showed a massive net loss of $1.0 billion for the year ended 31 December 2022, compared to a net income of $1.7 billion for the same period a year earlier. In the meantime, the fourth quarter ended with a net loss of $287.8 million compared to $521.3 million reached in Q4 2021.</p><p class="MsoNormal">Galaxy explains the poorer performance primarily by the 64% drop in the price of <a href="https://www.financemagnates.com/terms/b/bitcoin/" class="terms__main-term" id="261088a9-0f41-4202-a73c-31f75ba6bd93">Bitcoin</a> (BTC) over 2022. In January, BTC cost $46,500, ending the year at $16,500. Ethereum (ETH) also saw a similar depreciation, falling from $3,700 to $1,200. <a href="https://www.financemagnates.com/cryptocurrency/crypto-winter-fear-fad-or-opportunity-for-regrowth/" target="_blank" rel="follow">The crypto winter</a> negatively affected the performance of other companies in the sector, <a href="https://www.financemagnates.com/cryptocurrency/hive-blockchain-reports-90m-loss-in-q4-2022-amid-lower-bitcoin-prices/" target="_blank" rel="follow">including digital asset miners</a>.</p><p class="MsoNormal">"2022 was a formative year for Galaxy, and while we and our industry faced unprecedented macroeconomic events, we succeeded in staying the course and were able to opportunistically take advantage of strategic opportunities to build our operating businesses for the future. I have never been more confident in our go-forward strategy, businesses, and team," Michael Novogratz, the Founder and CEO of Galaxy Digital, commented in a press release.</p><p class="MsoNormal">At the end of 2022, Galaxy had 104 portfolio companies, in which it holds 145 investments. In Q4 2022, it invested in Veridise, a verification platform that conducts security audits for DeFi applications. Novogratz's company is still exploring other opportunities in the investment space.</p><p>2023 Paints Brighter Future for Galaxy Digital</p><p class="MsoNormal">The beginning of 2023, in which cryptocurrencies saw a rebound after the severe declines of 2022, started off decidedly better. Between early January and 24 March 2023, the company generated income before tax of $150 million. In the months ahead, Galaxy will focus on organically building its platform during the bear market and scaling and integrating recent strategic acquisitions.</p><p class="MsoNormal">Galaxy anticipates earning net profits in its operating businesses and positive gains from its liquid coin and investment holdings on its balance sheet for the entire Q1 2023. The increased market <a href="https://www.financemagnates.com/terms/v/volatility/" class="terms__secondary-term" id="7fd330d9-8855-4c31-9770-cb52b328c117">volatility</a> and volumes from existing counterparties positively impacted the company's operating business.</p><p class="MsoNormal">"The Company continues to lead from a position of strength, remaining open for business for our clients and counterparties. And as the market has improved year to date, we have generated approximately $150 million of income before tax while retaining a strong liquidity position through 24 March 2023," Novogratz added.</p><p class="MsoNormal">Galaxy Mining has increased its capacity by 100% since the start of 2022 by integrating the Helios site, <a href="https://www.financemagnates.com/cryptocurrency/mike-novogratzs-galaxy-saves-bitcoin-miner-argo-from-bankruptcy/" target="_blank" rel="follow">which was acquired at the end of last year</a>. The company aims to have over 4 EH/s of Hashrate Under Management by the end of 2023, with self-mining accounting for about 50% of the total.</p> This article was written by Damian Chmiel at www.financemagnates.com.

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Galaxy Digital Cuts Down Exposure to FTX to 38%

<p class="MsoNormal text-align-justify">Galaxy Digital, a digital asset financial services firm, says it has started the process of withdrawing $47.5 million from its $76.8 million exposure in cash and digital assets to the embattled cryptocurrency exchange FTX. This figure represents 62% of its holding in FTX and therefore means that it is reducing its holding to 38%.</p><p class="MsoNormal">Michael Novogratz, the Founder and CEO of Galaxy Digital, revealed this on Wednesday in a press statement announcing the firm’s financial results for the third quarter of 2022. </p><p class="MsoNormal">Novogratz noted that <a href="https://www.financemagnates.com/tag/galaxy-digital-assets-fund/">Galaxy Digital</a> remains focused on building for the future state of institutional adoption despite the “macroeconomic headwinds and structural revolution” currently facing the industry. He added that the firm was taking intentional steps to transform and simplify its operations. </p><p class="MsoNormal">The CEO's announcement comes a day after FTX, following a liquidity crisis reportedly related to <a href="https://www.financemagnates.com/cryptocurrency/ftx-and-binance-an-epic-drama/">the balance sheet</a> of its sister company Alameda Research, <a href="https://www.financemagnates.com/cryptocurrency/binance-to-acquire-ftxs-non-us-assets-to-clear-out-liquidity-crunches/">agreed to sell</a> its non-US operations to Binance, its competitor and the world’s largest cryptocurrency exchange. </p><p class="MsoNormal">Third Quarter Standing </p><p class="MsoNormal">Meanwhile, at the end of the third quarter of 2022 in September, Galaxy Digital saw a net comprehensive loss of $68.1 million. This is a stark departure from its posting in the same period last year when it made $517.9 million in profit. However, during Q1 2022, Galaxy Digital saw <a href="https://www.financemagnates.com/tag/galaxy-digital-assets-fund/">a net loss of $111.7 million</a>.</p><p class="MsoNormal">The firm also said it has a strong liquidity position of $1.5 billion and “continues to be in a position of strength for both organic and inorganic growth. Further, the company said Galaxy Asset Management, its asset management subsidiary, reported a 17% quarter-over-quarter increase in assets under management (AUM). The preliminary AUM capped at almost $2.0 billion in September, up from the figures obtained during the last quarter that ended June 30, 2022. </p><p class="MsoNormal">Additionally, Novogratz announced that Damien Vanderwilt, the Co-President and Head of Global Markets of the firm, will be transitioning to a Senior Advisor and Board Director role by mid-January 2023. </p><p class="MsoNormal">“Since joining Galaxy last year, Damien has played a vital role in our efforts to institutionalize the digital asset space, as well as helping the Company navigate through an unprecedented period of global growth and transformation,” Novogratz explained.</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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Crypto Winter’s Chilling Aftermath: Galaxy Digital and Riot Blockchain Report Q2 Losses

Even though the prolonged period of cryptocurrency winter is behind us, digital asset market companies still feel its adverse effects. The consolidation of Bitcoin (BTC) and other asset prices, low network activity, and increasing mining difficulty make it challenging for both miners and cryptocurrency funds to achieve profitability. The latest examples are publicly listed companies Riot Platforms Inc. (NASDAQ: RIOT) and Galaxy Digital Holdings Ltd. (TSX: GLXY), which reported negative financial results in the second quarter.

Galaxy Digital Loses $46 Million in Q2 2023

Founded by American investor Michael Novogratz, the cryptocurrency firm Galaxy Digital lost $46 million in the past quarter. This is a significant contrast compared to the profit of $134.3 million reported in the previous quarter.

“Compared to the first quarter, the decrease was primarily attributable to lower net realized gains on digital assets and net unrealized losses on investments, partially offset by higher net realized gains on investments,” the company explained in the official statement.

Trading profits decreased 54% quarter-over-quarter (QoQ) to $565 million. However, the company began seeking profits elsewhere, including in the asset management industry. Galaxy Asset Management achieved revenue of $33.8 million, representing an increase of 619% QoQ. Mining profits, operated by Galaxy Digital Infrastructure Solutions, grew 51% QoQ to $15.4 million.

"Galaxy's operating businesses performed well in the second quarter against a backdrop of continued uncertainty and regulatory pressure, as we continue to manage the Company to meet the evolving needs of our clients," Michael Novogratz, the Founder and CEO of Galaxy, said.

The company also reported maintaining a “strong liquidity position” of $696 million, consisting of $302 million in cash and $395 million in digital assets. Of the latter, stablecoins constituted $167 million.

Riot Blockchain Lost $27.7 Million in the Same Quarter

Turning to the publicly listed cryptocurrency miner, Riot Blockchain, the company reported Q2 2023 revenue of $76.7 million and achieved a record hash rate capacity of 10.7 EH/s. However, it was not enough to achieve profitability, with a net loss of $27.7 million for the three-month period. Compared to the loss a year earlier, this is a significantly improved result. In Q2 2022, Riot reported a loss of $353.6 million.

In the official statement, the company seems to focus mainly on the increasing hash rate capacity and expanding the execution of the power strategy. This led to a decrease in the average cost of mining a single Bitcoin to $8,389, compared to an average Bitcoin price of $28,000 during the period.

Riot Reports Second Quarter 2023 Financial Results, Current Operational and Financial Highlights.$76.7 Million in Total Revenue, New All-Time Record Hash Rate Capacity of 10.7 EH/s, and Expanded Execution of Power Strategy.“I am excited to announce second quarter 2023 results…

“I am excited to announce second-quarter 2023 results for Riot, as this quarter showcased ongoing execution of our long-term strategy and included a number of landmark announcements solidifying our future growth path,” Jason Les, the CEO of Riot, commented. “Riot’s core business is Bitcoin mining, and the scale of our vertically integrated operations and financial strength allowed us to execute on our power strategy at unmatched scale this quarter.”

The total revenue reached $76.7 million, which is up from $72.9 million during the corresponding three months in 2022. This surge was largely due to a boost of 27% in Bitcoin production compared to the same period last year, despite a drop in average Bitcoin prices.

Regarding production, the quarter saw 1,775 Bitcoins being mined, a significant increase from the 1,395 Bitcoins that were mined in the same quarter of 2022. This enhanced production is attributed to a considerable increase in the number of miners deployed compared to the previous year.

In the last month of the second quarter, several other publicly listed cryptocurrency companies reported declines in production. These include Argo Blockchain, which saw a drop of nearly 20% in efficiency, and HIVE Blockchain, which produced 259 BTC compared to a record 304.6 BTC the year before.

After the start of 2023, it seemed this year would be better for the industry than the very weak 2022, during which miners earned $6 billion less than the previous year. However, the dynamic growth of cryptocurrencies halted during the summer, and we are now witnessing market stagnation again.

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