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Galaxy Digital Surges with $296 Million Net Income in 2023 Financial Results

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Galaxy Digital, weathe­ring the 2022 storm, soars like a phoenix from the­ ashes — securing a staggering $296 million ne­t income in 2023 Financial Results. A stark turnaround from its hefty $288 million deficit the­ previous year. Refle­cting not merely enhance­d market climes but Galaxy’s calculated mane­uvers within crypto’s vast, digital expanse.

Galaxy Digital displayed re­markable fortitude amidst challenge­s, its resurgence ste­mming from strategic perseve­rance: enduring a financially tumultuous Q3 2023, marked by a substantial $94 million ne­t loss, yet rebounding impressive­ly in Q4 with a staggering $302 million net income.

By the conclusion of 2023, Galaxy Digital’s e­quity capital surged to a robust $1.8 billion. However, the­ genuine narrative of e­xpansion resides in its Assets Unde­r Management (AUM). As of February 2024, the­ AUM had almost doubled, reaching an impressive­ $10.1 billion, a remarkable improveme­nt from the $5.2 billion figure just the pre­vious quarter.

Crypto Market Surge Fuels Galaxy Digital’s Success

The re­surgence of the crypto marke­t in 2023 undoubtedly contributed to Galaxy Digital’s achieve­ments. The firm itself re­cognized the influence­ of soaring cryptocurrency values, espe­cially Bitcoin, on their favorable trajectory in 2024. The­y reported gene­rating approximately $300 million in pre-tax income by Fe­bruary 2024, driven by this digital asset appreciation and strate­gic operational growth.

Galaxy Digital isn’t just basking in the reflected glory of the market boom. Their proactive approach is evident in their ever-expanding service portfolio. The GalaxyOne platform caters to a growing institutional client base, currently serving 75 clients and managing over $1 billion in assets. This focus on institutional adoption aligns with the maturing cryptocurrency landscape.

The company’s foresight extends beyond service offerings. Their spot Bitcoin ETF, launched in January 2024 in collaboration with Invesco, has already garnered significant investor interest, attracting roughly $192 million in net inflows. This successful ETF launch further establishes Galaxy Digital as a key player in bridging the gap between traditional finance and the crypto world.

Galaxy Digital thrives financially – the­ir diverse offerings like­ lending, trading, mining, and banking equip them for cryptocurre­ncy’s evolution. They have loyal clie­nts, growing assets under manageme­nt, and a successfully launched ETF. This positions Galaxy Digital favourably to chart growth amid digital assets’ changing landscape­.

Related Reading | Bitcoin’s Next Stop Is $100K? Traders Bet On Continuation Of Rally: QCP Report

Bitcoin’s 40% Soar Leads Novogratz to Forecast a Dip

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In a recent Bloomberg TV interview, Bitcoin dominated as Michael Novogratz, the founder and CEO of Galaxy Digital, offered insights into the volatile world of cryptocurrency. Novogratz, a seasoned investor in the crypto space, foresees a potential dip in BTC’s price before it skyrockets to new highs, marking a crucial phase in its trajectory.

With Bitcoin’s remarkable rally this year, surging over 40%, Novogratz suggests a temporary retreat to the mid-$50,000 range amidst a broader consolidation phase. The catalyst behind this surge has been the successful launch of BTC exchange-traded funds (ETFs), attracting a fresh influx of investors into the crypto sector.

Novogratz describes the current market momentum as a “price discovery” phase fueled by the introduction of ETFs, reshaping the landscape of Bitcoin investment. However, he cautions against the market’s current leverage levels, particularly among millennials and Gen Z investors, who are diving into the frenzy, chasing highs.

Highlighting the difference in leverage dynamics between institutional players and retail traders, Novogratz emphasizes a notable shift. While big institutional players exhibit lower leverage, retail traders, especially through offshore crypto platforms, are heavily leveraged, indicating a potential risk factor.

Novogratz’s insights hint at the looming possibility of “washouts,” where the market experiences significant retractions before finding stability and continuing its upward trajectory. The presence of substantial leverage amplifies market volatility, posing challenges for investors navigating the crypto landscape.

Novogratz’s Optimism Amid Bitcoin Volatility

Despite the short-term fluctuations, Novogratz remains optimistic about Bitcoin’s long-term prospects, envisioning a positive trend as more investors allocate a portion of their portfolios to Bitcoin. However, he underscores the importance of understanding the risks associated with leverage, cautioning against overexposure in pursuit of quick gains.

In essence, Novogratz’s forecast sheds light on the complex interplay of factors driving Bitcoin’s price movements, urging investors to exercise prudence and long-term vision amidst the evolving crypto landscape.

Novogratz had also criticized the SEC’s crypto regulation under Chair Gary Gensler. He questions the denial of a Bitcoin ETF while allowing futures ETFs, citing inconsistencies. Novogratz predicts lawsuits may be dropped under a new chair, signaling a recognition of crypto’s role in finance.

As Bitcoin continues to capture headlines and investor interest, navigating its volatile journey demands a balanced approach and a keen understanding of market dynamics.

Solana Gears Up for Euro Stablecoin Revolution Despite Market Dip

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Solana Blockchain is soon to welcome new projects from major crypto firms, notably Galaxy Digital, Deutsche Bank’s DWS Group, and Dutch market maker Flow Traders. Recent reports have emerged that these digital-asset-focused entities are set to seek regulatory approval for their planned Euro-denominated stablecoin before the intended launch date of 12 to 18 months.

Crypto-focused asset management firm Galaxy Digital is eyeing collaborations with asset management firm DWS and trading specialist Flow Traders as they join forces to bring a stablecoin to the Solana blockchain, aiming to expedite the widespread adoption of on-chain assets. This ambitious initiative is strategically positioned to leverage the evolving regulatory landscape in Europe, with success contingent on securing various approvals.

The proposed stablecoin, dubbed AllUnity, is envisioned to be fully collateralized and denominated in euros. Galaxy Digital revealed this development on December 13, detailing plans to incorporate the entity in Frankfurt. The next crucial step involves seeking an e-money license from the German financial regulator BaFin. The company is optimistic about a rapid timeline, aiming to launch AllUnity within the next 12 to 18 months.

Notably, AllUnity is set to make its mark on multiple public permissionless blockchains, including Ethereum and, notably, Solana, as confirmed by a spokesperson in communication with Blockworks. This strategic move aligns with the broader vision of fostering a diverse ecosystem for the stablecoin’s utilization and accessibility.

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Solana Gears Up for Euro Stablecoin Revolution Despite Market Dip 2

Following a notable 20% surge, SOL appears to have yielded to the broader market pullback. The token, holding the sixth position, experienced an 8% decline over the past 24 hours. As of the current writing, SOL is at a level of $65. The commencement of the week witnessed a substantial wave of cryptocurrency sell-offs in the Asian markets, leading to a significant downturn in the values of major cryptocurrencies amid a decline in investor confidence.

Some cryptocurrency analysts are predicting an additional drop in digital asset values, leading traders to expect a market pullback.

Solana Meme Coin Bonk Inu Secures Listing On Coinbase

Simultaneously, the memecoin Bonk Inu on the Solana blockchain has achieved a listing on Coinbase, a prominent US-based cryptocurrency exchange. The announcement of BONK’s inclusion in Coinbase’s listing “Roadmap” prompted a notable 8% surge in the token’s price, moving from 00001229 to 00001132, as reported by CoinGecko.

Invesco and Galaxy’s Bitcoin ETF Advances Amidst Growing Investor Interest

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In a significant development, Invesco and Galaxy’s joint Bitcoin ETF, with the ticker BTCO, has made its appearance on the Depository Trust and Clearing Corporation’s [DTCC] website, joining the ranks of other leading Assets Under Management [AUMs] spot ETFs like BlackRock, Valkyrie, and Bitwise. The updated list, dated October 31, has caught the attention of investors, especially since BlackRock’s iShares Bitcoin ETF [IBTC] reappeared on the list after a brief disappearance. Investors have been closely monitoring the ETF list on the clearing website, anticipating the approval of these cryptocurrency investment products.

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Invesco and Galaxy's Bitcoin ETF Advances Amidst Growing Investor Interest 4

While the inclusion of BTCO on the DTCC list is a step forward in the application process for Invesco and Galaxy, it does not guarantee approval. The DTCC clarified that the list serves as an eligibility file, encompassing both active and potential ETFs. BlackRock’s iShares Bitcoin Trust ETF was added in August as part of the standard preparation for the launch of a new ETF. A spokesperson for the DTCC emphasized that being listed does not indicate the outcome of ongoing regulatory or approval processes.

The DTCC plays a pivotal role in the American ETF market. When an ETF is added to the DTCC list, it signifies that an intermediary bank has sought a DTCC designation for the ETF fund, enabling potential transactions at an unspecified future date, subject to the Securities and Exchange Commission [SEC] approval of the DTCC.

Bitcoin ETFs Contenders

Invesco, a prominent investment management company with $1.4 trillion in assets under management, initially filed for a Bitcoin ETF in the fall of 2021. Later, in June of this year, it refiled the application in partnership with Galaxy Digital. This move came shortly after BlackRock, a traditional finance giant, filed for a spot ETF just a week earlier, intensifying the competition in the cryptocurrency ETF space.

Meanwhile, VanEck, another key player in the race to launch a Bitcoin Exchange-Traded Fund, has submitted a revised application to the United States SEC. This updated application for a spot BTC ETF includes essential details about a significant financial transaction involving a block of 50,000 shares of the proposed ETF. Notably, a seed capital investor utilized Bitcoin as the currency for this purchase, highlighting the growing integration of cryptocurrencies into traditional financial markets. Investors continue to watch these developments closely, anticipating the evolution of the cryptocurrency investment landscape.

Bitcoin Touches 17-Month Peak Amid Whales & Utility Surge

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The price of Bitcoin skyrocketed to a significant milestone, hitting $35.2K today, a level not seen since May 2022. This historic achievement was propelled by a series of noteworthy events in the cryptocurrency market. Whale transactions, a key indicator of large trades made by influential investors, surged, reflecting a robust on-chain movement and hinting at a sustained upward trajectory. Additionally, a surge in active addresses, reaching levels reminiscent of October 2nd, provided further evidence of the cryptocurrency’s growing popularity and utility.

An intriguing development was the movement of dormant Bitcoins following the price surge. This movement caused the average age of coins to decrease, adding fuel to the already bullish sentiment prevalent in the market. These collective factors suggested that the recent surge in BTC’s price might just be the tip of the iceberg, indicating the potential for a prolonged bullish trend.

Bitcoin
Bitcoin Touches 17-Month Peak Amid Whales & Utility Surge 6

Adding to the excitement was the prevailing enthusiasm surrounding Exchange-Traded Funds [ETFs] in the United States. Stephan Livera, a renowned BTC podcast host and Head of Education at Swan Bitcoin, expressed his belief that the ongoing rally was merely a prelude to a massive bull run, predicting a peak value of approximately $500,000. Livera highlighted the significance of the approval of a spot Bitcoin ETF, stating that it would significantly impact Bitcoin’s price dynamics.

The recent surge in BTC’s price, fueled by the ETF frenzy, led to a temporary 10% spike, driven in part by a false report suggesting the approval of BlackRock’s iShares Bitcoin ETF application by the Securities and Exchange Commission [SEC]. Despite this setback, speculations surrounding an eventual ETF approval continue to circulate, keeping market analysts on the edge of their seats.

Bitcoin’s 75% Rise Post ETF Launch- Expert

Galaxy Digital research associate Charles Yu delved into the potential impact of Bitcoin ETFs on the market. He estimated the total addressable market size for BTC ETFs to be a staggering $14.4 trillion within the first year post-launch. Yu’s analysis considered the potential price impact of fund inflows into Bitcoin ETF products, using gold ETFs as a baseline comparison. According to his projections, BTC’s price could experience a 6.2% increase in the initial month after the ETF release and would gradually stabilize at a 3.7% monthly increase by the twelfth month post-launch.

These developments, coupled with expert analyses and market speculations, paint an exciting picture of the future trajectory of Bitcoin’s price, indicating the potential for further growth and a sustained bullish trend in the coming months.

Bitcoin Miner Argo Blockchain Sells Its Helios Facility For $65M

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Argo Blockchain, a leader in Bitcoin mining, declared that it had signed binding agreements with Galaxy Digital Holdings. A subsidiary of Argo will sell its Helios facility in Dickens County, Texas, under the terms of the agreement for $65 million to restructure its asset-backed debts.

According to the press release, Argo’s mining equipment will also be hosted at Helios by Galaxy. In addition, it will be given a new asset-backed loan with a total of $35 million and an initial period of 36 months.

However, 23,619 Bitmain S19J Pro mining machines in Helios and a few housed in Argo’s Canadian data centres will be collateral for this loan.

Moreover, the Bitcoin miner can mitigate any mining machine downtime caused by the sale of the Helios facility because of the two-year hosting contract with Galaxy.

The funds from the sale of Helios, together with a part of the borrowing, will be used to repay the debt ($84 million) and interest payments ($1 million). Additionally, a collateral account managed by NYDIG ABL LLC will transfer $6 million to the company upon this repayment. 

The deal with Galaxy is transformative for Argo and advantageous to the company in a number of ways, according to Argo’s CEO, Peter Wall.

He said:

It reduces our debt by $41 million (£34 million) and provides us with a stronger balance sheet and enhanced liquidity to help ensure continued operations through the ongoing bear market.  

Bitcoin Miner’s Share Suspension Announcement

Yesterday, Argo Blockchain tweeted that Nasdaq has temporarily suspended the trading of its American depositary shares (ADS). Due to today’s news, the company claimed that trading must be put on hold. 

The move comes in the period when the company was troubled by financial issues and was the subject of bankruptcy rumours because of rising energy prices and declining Bitcoin BTC pricing.

Rumours were refuted by the team, which stated that it had not yet filed for bankruptcy but admitted that it might not have enough cash in the following month to fund continuous operations.

Additionally, since its shares had fallen below $1 for 30 straight days, it said last week that Nasdaq would be paying it more unfavourable attention. Within the next 180 days, the firm would be delisted from Nasdaq if its share price did not settle over $1.

Related Reading | FTX Hack: Federal Prosecutors Investigating Alleged Cybercrime Worth Over $370M 

Argo Blockchain Is Running Out of Cash; Will It Be Forced Into Bankruptcy? 

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On December 12th, Argo Blockchain, a large-scale supplier of services for mining cryptocurrencies and smart contracts, made a formal announcement that it “is at risk” it might not have enough funds on hand to continue running its business in the coming month.

In the blog post, it is said that the company is in preliminary talks with a third party to sell some assets and enter into a financing deal for equipment, which it feels would help its balance sheet and liquidity.

As TronWeekly recently reported, compass Mining’s content director Will Foxley tweeted a screenshot of the Argo Blockchain on December 9th concerning the company’s impending bankruptcy on December 12th.

However, two days ago, after accidentally disclosing sensitive information about its bankruptcy, it now officially announced that there is a possibility of such action: 

The company is hopeful that it will be able to consummate the transaction outside of a voluntary Chapter 11 bankruptcy filing in the United States, although there is no assurance that the company can avoid such a filing.

In order to analyze these strategic possibilities, they hired investment bankers Stifel GMP and its subsidiary Miller Buckfire & Co., LLC, legal counsel McDermott Will & Emery LLP, and financial counsel Berkeley Research Group, LLC.

The company also clarifies that on December 9th, trade in its securities on the London Stock Exchange and Nasdaq was suspended due to accidentally disclosed information claiming that the company was going to declare Chapter 11 bankruptcy. “Shareholders should note that the company has not filed for bankruptcy at this time.”

Argo Blockchain Suffering From Financial Issues

Previously, Argo had already warned that it was in danger of stopping operations owing to a shortage of funding. According to a report on October 31st, the cryptocurrency mining company was now looking for new financing options after failing to get significant funding from a key investor.

According to the press release statement:

The company signed a non-binding LOI with a strategic investor to raise approximately £24 million ($27 million) via a subscription for ordinary shares. The company no longer believes that this subscription will be consummated under the previously announced terms.

At that time, the company has also taken action to protect cash and further maximize liquidity. For cash profits of $5.6 million, the company sold 3,843 brand-new, unopened Bitmain S19J Pro machines, totaling 384 PH/s of total hashrate capacity. 

These units were the final batch of the first Bitmain purchase, and installation was planned for October 2022. The company’s overall hashrate capacity thus stays at 2.5 EH/s.

Due to the lack of funding, Argo has been taking steps to protect its funds and maximize its liquidity. In the past, the company has actively sold its mined Bitcoin assets to reduce debt owed to crypto investment company Galaxy Digital. 

After selling 637 BTC in June 2022, Argo sold a further 887 BTC in July.  It subsequently joined a large group of cryptocurrency mining companies that decided to sell their own BTC during the bear market of 2022.

BitGo Seeks $100M From Galaxy Digital For Terminating Merge Deal

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BitGo took to Twitter to confirm that it has filed a $100 million lawsuit against investment management firm Galaxy Digital for terminating an acquisition deal worth $1.2 billion.

“Late yesterday, BitGo filed a lawsuit against Galaxy Digital seeking damages of more than $100 million arising from Galaxy’s improper repudiation and intentional breach of its merger agreement with BitGo,” the crypto custody firm wrote.

Adding that the complaint was filed in Delaware Chancery Court under seal, and should be open to the public shortly after 5 p.m. ET on 15 Sept.

This is how the saga unfolded.

In what seemed to be a landmark deal for the crypto industry quickly headed south when Galaxy August announced that it is backing out from the deal due to a “failure to deliver audited financial statements for 2021,” while exercising “its contractual right to terminate” the cash-and-stock transaction.

“No termination fee is payable in connection with the termination,” the firm had added. The proposed acquisition was the global crypto industry’s first $1 billion deal.

BitGo Vs Galaxy Digital: A Deal Turned Sour

Following that, the digital asset trust firm swiftly responded. Brian Timmons, a partner with Quinn Emanuel law firm, which represents the custodian said,

“BitGo has absolutely delivered the audits that were needed to get this deal done. Galaxy is the one with the problem and it’s saying: It’s not me, it’s you”.

When questioned about BitGo‘s statements, Galaxy spokesman Michael Wursthorn replied, “I can’t speak to their’s statements.”

Galaxy Digital revealed its intention to buy BitGo for $1.2 billion last year. The details of the arrangement, however, were reportedly being renegotiated, The Block reported in March of last year.

Only one week after Galaxy Digital filed a $554 million loss for the second quarter did the failed merger become a public knowledge. Despite the losses, the firm kept raising money with the intention of closing deals.

“BitGo agreed to extend this deal back in March only because Galaxy agreed to a breakup fee,” Timmons said. “Without it, BitGo would never have agreed to the extension. It had other interested suitors.”

According to Galaxy’s Wursthorn, his business has every right to terminate the agreement and that they wont pay a termination fee.

US eyeing leadership in global cryptoeconomy?

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In a recent Twitter thread, Galaxy Digital CEO Mike Novogratz shared his recent thoughts on the state of the US in the cryptocurrency industry globally. He further claimed that crypto and blockchain can transform the world in previously imagined ways.

It also offers the industry much-needed legitimacy, according to Novogratz, by instructing federal agencies to regulate it. As a result, rather than being solely a tool for speculation, cryptocurrencies can now be seen as a stand-alone investment vehicle.

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Mike Edward Novogratz, CEO Galaxy Digital Holdings Ltd.

Mike Edward Novogratz is an American investor. He is currently the CEO of Galaxy Digital Holdings Ltd., a branch of Galaxy Investment Partners, a firm that focuses on investments in the cryptocurrency world.

US president’s Executive Order a game changer

Mike Novogratz said that President Joe Biden’s much-talked-about executive order is “welcomed engagement” from the White House.

As reported by TWJ, On Wednesday, American President Joe Biden signed an executive order directing the federal government to investigate the risks and benefits of cryptocurrencies. It’s a long-awaited edict that has the crypto community on pins and needles.

While legislators have been careful not to dismiss any structural risks associated with cryptocurrency, fears about the role of stablecoins have grown. These are digital tokens that are supposed to be pegged to actual currencies like the U.S. dollar.

Biden had remained tight-lipped about whether the United States should develop its own digital currency, but, he is now urging the government to make CBDC research and development a top priority.

However, last year, the Federal Reserve began looking into the possibility of issuing a digital dollar. The central bank issued a long-awaited research outlining the benefits and drawbacks of such virtual money, but it has yet to say whether the United States should create one.

While CBDCs have the potential to significantly speed up payment settlement, governments are considering a variety of concerns about financial stability and privacy.

Novogratz claims in his thread that Galaxy Digital is eager to work with the government further. In light of recent events, last month, the billionaire said that both Bitcoin (BTC) and gold are seen as safe havens for investors who are worried about conventional currency depreciation. At the time of press, Bitcoin was priced at $39,113.99 and had slightly depreciated by 0.14% in the last 24 hours.

Goldman Sachs unites with Galaxy Digital to offer ETH fund

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Leading global investment bank Goldman Sachs [GS] has partnered with diversified asset management firm Galaxy Digital to offer its clients access to ether [ETH]. This is in accordance with regulatory documents filed with the U.S. Securities and Exchange Commission [SEC] on 8th March.

Filings show that with an investment of at least $250,000, the fund has collected over $50 million from 28 clients. It’s not known exactly how much GS is responsible for as the investment bank was not involved when it first launched.

As stated in the amended Form D filing, “Goldman Sachs & Co. LLC will receive an introduction fee” for a number of clients it brings to the “Galaxy Institutional Ethereum Fund.” Sources revealed that the latter had issued that fund last March.

Galaxy Digital is not the first time Goldman Sachs has collaborated with. Previously in June, Galaxy agreed to pour liquidity to Goldman Sachs’ Bitcoin [BTC] futures offering. Besides that Galaxy also offers a bitcoin fund to Morgan Stanley [MS] clients in a similar arrangement, a review of the filings shows.

Apart from GS, an alternative investments platform called CAIS Capital LLC will receive “placement fees” for referring clients to the institutional fund, Tuesday’s SEC filing said. It’s separately involved in a different Galaxy-backed Ethereum fund whose filing also hit Tuesday.

The latest development has its roots back in mid-2021 when Mathew McDermott, head of digital assets at Goldman announced that the investment bank was working to offer options and futures trading in Ether.

Goldman Sachs hit with talent exodus

The bank recently grabbed headlines when its global co-head of operations Roger Bartlett, a 16-year veteran announced joining crypto exchange Coinbase to lead its financial operations, in a LinkedIn post, just weeks ago.

In May 2021, crypto exchange Coinbase hired Goldman’s former co-head of government affairs Faryar Shirzad as its new chief policy officer to help with lobbying efforts.

Similarly, Chris Perkins, a former Citigroup executive who had around 725 employees working under him, left last September to become the president of crypto investment firm Coinfund. As reported by Financial News, crypto has become a much sought-after career option for executives, especially at large investment banks.