Galaxy Digital’s Impressive Growth Across All Sectors: A Canaccord Analysis

By Lars Weer Last updated May 15, 2024

Galaxy’s net income surged by 40% in the last quarter, reaching $422 million.
The approval of spot bitcoin ETFs played a significant role in boosting counterparty engagement.
The company is exploring potential opportunities in both mining and AI hosting, according to Canaccord Genuity.

Galaxy Digital (GLXY) is strategically advancing its business operations amidst a challenging regulatory environment, maintaining a strong competitive edge, according to a report from Canaccord Genuity following the crypto financial services firm’s first-quarter earnings release.

Headquartered in Toronto, and led by CEO Mike Novogratz, the firm reported a 40% increase in net income from the prior quarter, amounting to $422 million. The brokerage firm expects this upward trend to persist.

“We are pleased with the notable growth and maturation across all three of the company’s operational divisions, and we anticipate this progress to continue over the coming quarters,” commented the team of analysts headed by Joseph Vafi.

Galaxy Trading expanded its counterparty count to 1,161 in the first quarter, up from 1,052 in the previous quarter. This increase contributed to a 79% rise in counterparty trading revenue, which reached $66 million. This growth was attributed to the authorization of spot bitcoin (BTC) exchange-traded funds (ETFs) in January.

“The approval of spot bitcoin ETFs has significantly driven enhanced counterparty engagement, with more traditional asset managers and hedge funds entering or reentering the market,” the analysts indicated.

GalaxyOne reported notable momentum, securing over 75 institutional clients and managing more than $1 billion in assets on its platform. “This diverse clientele provides the company with a robust market for offering a comprehensive range of services, such as custody, lending, spot trading, hedging, and derivatives,” the report stated.

The asset management segment also experienced substantial growth, concluding the quarter with $7.8 billion in assets under management (AUM), marking a 50% increase from the previous quarter, Canaccord highlighted.

“Galaxy continues to expand its infrastructure and GK8 business, boosting assets under stake by 100% quarter-on-quarter to $486 million,” according to the report. The firm acquired the self-custody platform GK8 for $44 million in February of the previous year.

The company also enhanced its proprietary mining hashrate, and the Helios facility presents a “strategic opportunity for Galaxy to venture into both mining and AI hosting in the future,” stated Canaccord. The brokerage maintains a buy rating on Galaxy shares, setting the price target at C$17. As of Tuesday, the stock closed at C$12.41.