How Bitcoin ETFs Fueled Galaxy Digital’s 40% Rise
Galaxy Trading also saw an increase in revenue and volumes.
Toronto-based Galaxy Digital Holdings Ltd. has become a major player in the financial space after seeing net income rise 40% to $422 million.
Interestingly, analysts attribute this growth to the impact of spot prices. bitcoin [BTC] Exchange Traded Funds (ETF). The upward trajectory coincided with a notable resurgence in net inflows seen in Bitcoin spot ETFs on May 14, following four consecutive weeks of capital outflows.
According to reports, there were total inflows of $116.8 million last week, indicating renewed interest among investors.
Good Streak for Bitcoin
These inflows could have also had an impact on Bitcoin price action. After showing all the red for the past week, Bitcoin, at press time, was recovering on the charts following a 6% 24-hour surge, which was confirmed by the Relative Strength Index that rose near from level 50 on the charts.
“We are encouraged to see solid progress in growth and maturation in each of the company’s three operating units in the coming quarters,” wrote analysts led by Joseph Vafi.
Providing more information on Galaxy Digital’s first quarter results, the analysts further stated the following:
“Spot bitcoin ETF approvals have been a major catalyst for increased counterparty participation as some of the more traditional asset managers and hedge funds are entering or re-entering the space.”
Galaxy Digital First Quarter Report
According to the first quarter report presented by the company:
“Trading reported counterparty trading revenue of $66 million in the first quarter, primarily driven by increased revenue from derivatives and favorable asset price movements. Online with this, counterparty trading volumes increased 78% versus the prior quarter, and our average loan book size expanded to $664 million. Galaxy continues to onboard new counterparties and ended the first quarter with 1,161 total trading counterparties.”
The report noted that counterparty trading volumes increased by 78% compared to the previous quarter, while the average loan portfolio size expanded to $664 million.
This underlines the growing importance оf platforms like Galaxy Trading іn facilitating the exchange and investment іn digital assets.
Galaxy reported record Bitcoin mining revenue оf $31.5 million, a 69% increase from the previous quarter. The company mined 373 bitcoins at an average cost оf less than $19,500 per Bitcoin, highlighting its efficiency іn its mining processes.
Mike Novogratz, CEO оf Galaxy Digital Holdings Ltd, commented that its first quarter results “underscore the strength and resilience оf our business model.”
The company also increased its proprietary mining hash rate and the Helios facility “presents an opportunity for Galaxy to get into both AI mining and hosting over time,” the broker said. Canaccord has a Buy rating on Galaxy shares with a price target of C$17. The stock closed at C$12.41 on Tuesday.
All in all, while optimism prevails, market uncertainties remain unpredictable. However, the launch of the Invesco Galaxy Bitcoin ETF, along with two new XTrackers Exchange Traded Commodities in partnership with DWS Group, paints a promising path forward for the company.
By Leonardo Perez