Galaxy Digital Reports Q2 Loss of $176M on Drop in Crypto Prices

Galaxy Digital Reports Q2 Loss of $176M on Drop in Crypto Prices

Galaxy Digital, a U.S. financial services firm, posted a second-quarter loss as a result of a decline in cryptocurrency prices.

Its net comprehensive loss for the quarter, which excludes non-controlling interests, totaled $175.8 million, compared with a profit of $35.3 million on the same basis during the same period the year before, according to a press release on Monday,.

The firm, which was co-founded by former hedge fund manager and billionaire Michael Novogratz, attributed the loss to a 34% decline in crypto prices that included a 41% decline in the price of bitcoin during the quarter.

Galaxy Digital said the drop in crypto prices was partly offset by its core operating activities, including liquidity provision and execution services, counterparty trading volume growth and the addition of blue-chip partnerships to the firm.

“While the second quarter included significant volatility and macro-related headwinds to near-term results, our core operating activities … delivered another quarter of rapid growth consistent with the pace of adoption of the crypto economy,” Novogratz said.

The firm also said its trading division saw continued growth in volume with a 90% increase from the first quarter and an increase of over 560% from the second quarter of 2020.

Gross counterparty loan originations were up over 130% since March 31 to about $1.56 billion. As of July 31, Galaxy Digital reported preliminary assets under management of over $1.6 billion.

Galaxy Digital is a merchant bank providing cryptocurrency-focused services for institutional investors. In May, the firm bought crypto custodian BitGo for $1.2 billion.