Galaxy Digital Reports Q2 2022 Earnings Results, Shares Up 20%
- Galaxy Digital asset management (GDAM) had about $1.7 billion in assets under management (AUM) as of Q2 2022.
- Reportedly, GDT onboarded more than 40 additional counterparties to its trading platform last quarter.
On Monday, crypto and blockchain investment management firm, Galaxy Digital Holdings Ltd. (TSX: GLXY) released its earnings report for Q1 and Q2, 2022, and the first six months ending June 30. The company’s CEO, Mike Novogratz, expressed his delight at the company’s performance despite the market and macroeconomic environment challenges.
Novogratz said the company maintained more than $1.0 billion in cash and $1.5 billion in liquidity because of its commitment to excellent credit standards and careful risk management. He added that the company is strong enough to withstand long market volatility and keeps looking for opportunities to expand sustainably.
Following the earnings results announcement, the company’s stock market has risen by 20.56 percent to trade around $9.03, according to MarketWatch.
Galaxy Digital Financial Highlights
Compared to the previous year, where it suffered $182.9 million in unrealized loss, Galaxy Digital’s unrealized loss for the last quarter increased to $554.7 million. The unrealized losses were in cryptos and its trading and principal investment businesses.
The significant decline in crypto prices was the leading cause of these losses. However, Galaxy was able to offset part of these losses from the profits in its mining business.
Trading and principal investment businesses brought in $1.1 million in income for the quarter. Galaxy’s mining business generated $10.9 million in revenue for the quarter. The figure represents a 204 percent increase in income compared to the same period in 2021. The report also revealed a 23 percent increase in the Partner’s capital quarter-on-quarter earnings.
Whereby it rose from $1.5 billion to $1.8 billion. However, the net comprehensive loss in the quarter means the Partner capital’s earnings for the quarter decreased by 27 percent.
Reportedly, The sharp decline in the total crypto market cap was partly responsible for this decrease. Worth noting, the company reported a 51 percent quarter-over-quarter decline in the total value locked in decentralized finance (DeFi).
Notably, the company sold some of its liquid positions to increase its cash position during the second quarter. Thereby reducing its net digital asset position from $910.5 million (as of Q1 2022) to $474.3 million as of Q2 2022.
Despite the decline in counterparty trading volumes and crypto prices in the quarter, there was still a rise in Galaxy Digital trading (GDT)’s client base. Additionally, the company also generated massive revenue from its counterparty-facing business.
Reportedly, GDT onboarded more than 40 additional counterparties to its trading platform last quarter. Thus, it has about 850 counterparties and keeps providing liquidity in over 100 digital assets.
Nevertheless, there was a 35 percent decline in GDT’s year-on-year counterparty trading volumes. Also, the volume was down by 15 percent from the quarter ending March 31, 2022.
According to the report, Galaxy Digital asset management (GDAM) had about $1.7 billion in assets under management (AUM) as of Q2 2022. However, it is a 40 percent decrease compared to the 56 percent decrease in the total crypto market cap from Q1 2022. The GDAM products consisted of $765 million worth of AUM.