Galaxy Digital reported a net loss of $177 million in the second quarter, compared with a net profit of $1.6 million in the same period last year.
Meanwhile, the company's net revenue in the second quarter reached $53.7 million, down from $108.7 million in the same period last year.
The company blamed the losses on the downturn in the crypto market during this period. They were challenged with net losses from digital assets and investments, marking a sharp departure from previous financial performance.
Despite an overall net loss, Galaxy still generated revenue across various business segments, including Global Markets, Asset Management and Digital Infrastructure Solutions. The company continues to focus on strategic initiatives to drive future growth and stabilize its financial performance amid volatile markets.
Second quarter results
Galaxy Digital's equity reached $2.1 billion as of June 30, down 3% from the previous quarter. The company's liquidity position also weakened, falling 11% to $1.33 billion.
Despite this decline, Galaxy increased its net cash and stablecoin holdings by 150% to $409 million, demonstrating a strong cash management strategy amid market volatility.
The company recorded a strong increase in assets under protection (AUS), rising to $3.3 billion on July 18, compared to $486 million at the end of March. This growth was mainly attributed to driven by the acquisition of CryptoManufaktur, a blockchain node operator.
Galaxy Global Markets experienced a significant decline in counterparty transaction revenue, falling to $24 million in Q2 2024, down 64% quarter-over-quarter. This decline was mainly due to lower trading volumes and negative volatility in asset prices.
Despite the decline, the trading business generated about $90 million in revenue from the beginning of the year to June, up nearly 80% from the first half of 2023.
Galaxy Asset Management (GAM) reported a decrease in assets under management (AUM), down 42% to $4.6 billion. Management and performance fees also decreased 19% to $14.5 million.
These declines were mainly due to liquidation of assets related to the FTX fund and the general decline of the market. However, GAM announced the launch of the Invesco Galaxy Ethereum ETF in partnership with Invesco, a strategic move to enhance its products.
The Digital Infrastructure Solutions segment reported mining revenue of $24 million for the quarter, down 24% from the first quarter. This decline is mainly due to the Bitcoin split in April.
Galaxy's proprietary mining hash rate decreased by 5% to 2.9 EH/s. However, this segment grew 341% in assets under protection, reaching $2.1 billion at the end of June, underscoring Galaxy's growing influence as a major validator on the Solana network.
Prospects
Galaxy Digital continues to move forward with strategic initiatives, including plans to reorganize and become an incorporated company in Delaware.
In addition, the company also plans to list on Nasdaq, pending approval from regulators and shareholders. They filed an amendment to their registration statement on July 26, which is currently under review by the SEC.
The reorganization and listing plan on Nasdaq are intended to comply with regulatory standards and enhance Galaxy Digital's market position. The move is expected to attract more institutional investors and provide greater liquidity to the company's shares.
Galaxy Digital said it remains optimistic about its future prospects despite challenges in the second quarter. The company is focused on expanding its digital assets and blockchain infrastructure, as evidenced by the acquisition of CryptoManufaktur and partnerships with major financial institutions.
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