Galaxy Digital, a New York-based crypto financial services and investment firm and the eighth-largest public holder of Bitcoin, plunged after reporting second-quarter results that fell short of analyst expectations. It was the company’s first earnings release since listing on the Nasdaq in May.
Galaxy Digital posted revenues of $8.66 billion, down 2.5 per cent year on the prior year, and earnings per share of $0.08, short of the $0.18 consensus forecast, according to Barron’s. The earnings shortfall was driven by a more than 20 per cent decline in digital asset trading volumes, reflecting weaker spot activity. Even so, Galaxy outperformed the broader market, where spot volumes fell around 30 per cent over the same period, according to Galaxy’s report.
The stock dropped as much as 11 per cent in early trading on Tuesday before closing at $27.68.
The group uplisted its shares from the US over-the-counter (OTC) market to the Nasdaq on 16 May, retaining its Toronto Stock Exchange (TSX) listing. Since the move, the stock is up about 18 per cent.
In its Q2 filing with the SEC, Galaxy disclosed that it had increased its Bitcoin holdings by 4,272 coins during the quarter, a 33 per cent rise from the 12,830 held in March, securing its position as the eighth-largest public Bitcoin holder, according to Bitcointreasuries.net.
On 1 August, Head of Product David Knowlton published research on corporate Bitcoin allocations, arguing that “the best approach to portfolio construction is to ‘get off zero’ when it comes to a Bitcoin allocation.”
Galaxy’s CEO Michael Novogratz said in the company’s earnings call the recent surge in companies holding crypto assets (primarily Bitcoin) on their balance sheets may have reached its peak. Novogratz noted “we've probably gone through peak treasury company issuance. The question now is which of the existing companies become monsters.”
