Galaxy Digital swings to profit after $1B net loss in 2022

The Mike Novogratz-led digital asset firm recorded a pre-tax income of $150 million during most of Q1 2023.

On March 28, Canadian investment firm Galaxy Digital, operated by blockchain personality Mike Novogratz, disclosed that it had achieved a preliminary pre-tax income of $150 million from Jan. 1, 2023, to March 24, 2023. 

The results followed a $1-billion net loss in 2022, which was largely attributed to a $659-million unrealized loss on digital assets and a $496-million unrealized loss on investments. As told by Novogratz:

“2022 was a formative year for Galaxy, and while we and our industry faced unprecedented macroeconomic events, we succeeded in staying the course and were able to opportunistically take advantage of strategic opportunities to build our operating businesses for the future.”

On May 19, 2022, Novogratz claimed that he was “permanently humbled” by the collapse of the $40-billion Terra ecosystem and reiterated the crypto industry “looks stronger than ever and wouldn’t be going away any time soon.” A year earlier, on Feb. 3, 2021, Cointelegraph reported Galaxy Digital invested $25 million into the Terra protocol. Galaxy Digital reported a net income of $1.7 billion in 2021 during the height of the crypto bull market. 

#Bitcoin is a report card on monetary policy and financial stability. In other words, it was built for these times.
 
On a risk-adjusted basis, BTC is the best-performing asset of the year, outpacing growth stocks, banks, and major stock benchmarks. pic.twitter.com/RZ0xZcgsLT

— Mike Novogratz (@novogratz) March 23, 2023

In August 2022, Galaxy Digital reportedly dropped its plans to go public in the United States after terminating a $100-million deal to acquire digital asset custodian BitGo. Later in November, the firm disclosed a $77-million exposure to bankrupt cryptocurrency exchange FTX, with $48 million likely locked in withdrawals. 

By the end of 2022, partner capital in the firm declined from $2.6 billion to $1.4 billion year-over-year. Despite setbacks, Novogratz said the firm has a strong liquidity position of $957 million. Among other items, the company projects its subsidiary, Galaxy Mining, will have grown its Bitcoin (BTC) mining hash rate to 4 exahashes per second by the end of this year, partly aided by its $65-million acquisition of Argo Blockchain’s flagship Helio facility. 

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