By
Godfrey Benjamin
April 20th, 2024
Despite a severe downturn during the second quarter, Galaxy Digital maintains a solid cash position sufficient to deal with any further headwinds.
On Monday, August 8, Galaxy Digital Holdings released its results for the second quarter (Q2) ending June 30, 2022. The company’s loss tripled to $554 million during the second quarter in comparison to the $189 million loss for the same period in 2021.
The company attributed this loss to the border market correction in the second quarter. The official press release notes:
“The increase in loss was primarily related to unrealized losses on digital assets and on investments in our Trading and Principal Investments businesses, due to decreased digital asset prices, partially offset by profitability in our Mining business”.
One of the major blows to Galaxy Digital in Q2 was the collapse of the Terra ecosystem. Company CEO Mike Novogratz was one of the biggest proponents of Terra LUNA. However, despite major losses, the company maintained a liquidity position of $1.5 billion. This includes $1 billion in cash and $474.3 million in net digital asset position. Out of its total crypto position, the company holds $256.2 million in form of stablecoins.
By the end of the second quarter, Galaxy Digital cut down its net digital assets3 position to half. This was due to the liquidation of certain assets in order to increase the cash positions. Speaking on the matter, Michael Novogratz, Founder and CEO of Galaxy Digital said:
“I am proud of Galaxy’s outperformance during a challenging market and macroeconomic environment. Prudent risk management, along with our commitment to exacting credit standards, allowed us to maintain over $1.5 billion in liquidity, including over $1.0 billion in cash. We remain in strong position to weather prolonged volatility, and to take advantage of strategic opportunities to grow Galaxy in a sustainable manner.”
Mike Novogratz Makes Bitcoin Price Prediction
The Galaxy Digital founder Mike Novogratz said that he expects BTC to remain range bound after the recent price pump. He further added that there haven’t been any significant institutional inflows in Bitcoin. During his recent interview with Bloomberg TV, Novogratz noted:
“Will Bitcoin get through $30,000 on this move up? We will see – I’m doubtful. I think we’re going to probably be in this range now. I quite frankly would be happy if we’re in a $20,000, $22,000 or $30,000 range for a while. We’re not seeing huge institutional flows, to be fair, but we’re not seeing anyone back away.”
He further adds that with quantitative tightening measures initiated by the Federal Reserve, “I don’t see the mania that we saw in 2021 or 2017 reigniting”.