Galaxy Digital Second-Quarter Net Loss Widens as Crypto Market Retreats

• The loss is almost four times as wide as that of the corresponding quarter a year ago.
• The company cited declines in digital asset markets for the result. Bitcoin fell 12% in the second quarter.

Digital asset financial services company Galaxy Digital (GLXY) posted a second-quarter net loss of $177 million, almost four times as wide as the year-earlier period, as crypto markets retreated.

The New York-based company, whose units include trading, asset management and investment banking, said it's still in the process of incorporating in Delaware and looking to list on Nasdaq. Last month it bought almost all the assets of CryptoManufaktur, including almost $1 billion of ether ETH$1,780.70.

Founder and CEO Mike Novogratz has previously said Galaxy's aim is to become the "Goldman Sachs of crypto." Its fortunes could be seen as a bellwether for the wider industry due to the array of different sectors it operates in.

Many of the company's activities were hit by the decline in crypto markets. Bitcoin BTC$93,763.11, the largest cryptocurrency by market cap, slid 12% in the three-month period, the most since fourth-quarter 2022.

Revenue from counterparty trading slumped more than 50% to $24 million compared with the year-earlier quarter, driven "by lower trading volumes" and "unfavorable asset price movements" a company statement shows. Bitcoin rose 7% in the year before and touched record highs in first-quarter 2024.

While mining revenue rose 2% to $24 million, the direct mining profit margin narrowed to 56% from 64%, driven by April's mining reward halving.

Galaxy is among the issuers of spot bitcoin and ether ETFs in the U.S., which it has listed in partnership with investment manager Invesco. The bitcoin ETF (BTCO) has assets under management of $525 million, while its ether equivalent (QETH) holds $15.3 million, according to data by TradingView. Total assets under management at Galaxy Asset Management were $4.6 billion.

For the first half, the New York-based company posted net income of nearly $245 million, an increase of more than 175% on first-half 2023.

Galaxy's shares fell 11.8% to C$14.63 as of 12:09 p.m. in Toronto (16:09 UTC).

Read More: Galaxy Digital Has Strong Momentum Across All Business Lines: Canaccord

Update (Aug. 1, 16:20 UTC): Adds divisional earnings, ETFs.