The latest earning report for Galaxy Digital shows that the company incurred smaller losses, thanks to a rise in the broader crypto market.
Since the beginning of the year, the price of Bitcoin has managed to record gains of about 80%, while the overall crypto market has also climbed.
The report
The Newyork-based company saw a noteworthy financial turnaround as per the report, as its net loss for the second quarter stood at about $46 million.
Galaxy Digital is helmed by Bitcoin bull and billionaire investor Mike Novogratz. In the same period a year earlier, the company had recorded a massive net loss of about $555 million.
A statement from Novogratz said that the operating business of the company had done well in the second quarter despite continued regulatory pressure and uncertainty.
A diversified approach is used by Galaxy Digital for its operations, as it is spread across five different business segments.
These are crypto mining, investment banking, principal investments, asset management, and trading. The trading revenue of the firm in the second quarter was about $59.5 million.
As compared to the last quarter, this is a decline in the revenue by almost 54%. According to Galaxy, this decline is due to several reasons.
It said that net gains on derivatives had declined and the net realized gains associated with digital assets had also reduced.
Plus, there had also been a slowdown in the trading activity in the broader crypto market, which had seen a decline in trading volume.
The increase
In comparison, there was a staggering rise in the asset management revenue of Galaxy Digital in the second quarter, as it reached $33.8 million.
As compared to the first quarter, this figure depicts a whopping increase of 619%. The company said that its venture platform was the reason for the substantial surge in asset management revenue.
The investments made via the venture platform have seen a rise in their net realized gains. There was also a notable increase in the Bitcoin mining revenue of the company.
In the second quarter, this stood at about $15.4 million, which was a 51% rise from the Bitcoin mining revenue of the previous quarter.
The mining operations
Galaxy Digital Infrastructure Solutions (GDIS) conducts the company’s proprietary mining activities, which was able to generate a higher income.
In 2020, Galaxy first launched its mining operations and it not only managed its own mining facilities but also offered hosting services.
The company acquired the Helios Bitcoin mining facility from Argo Blockchain in December last year, which is based in Texas, for a deal worth $65 million.
Novogrtz stated that Galaxy had been able to achieve long-term growth due to its strong balance sheet, prudent risk management tactics, and investments.
He had also disclosed earlier this summer that the company was looking to move its operations offshore.
This was in light of the crackdown against the crypto industry in the United States by the Securities and Exchange Commission (SEC), which has created uncertainty.