Financial services and investment management giant Galaxy Digital recorded a net comprehensive loss of $111.7 million in the first quarter of 2022, citing unrealized losses on digital assets as the reason for the drop.
Galaxy Digital revealed its financial results for Q1 in a press release on Monday (May 9, 2022). The company compared the loss to an $858.2 million gain in Q1 2021. It also connected the net loss to investments in its trading and principal investment businesses.
The firm, however, recorded profit in investment banking, asset management, and mining businesses.
Also, the financial results showed that Galaxy Digital Asset Management, as of Q1 2022, which ended on March 31, had total assets under management (AUM) of $2.7 billion. This was a 5% decline from its record at the end of Q4 2021 on December 31.
The total AUM, meanwhile, comprised “$2 billion in the GDAM’s Galaxy Fund Management products, and $735 million in the Galaxy Interactive venture franchise.”
According to a statement by Galaxy Digital founder and CEO Mike Novogratz:
“Galaxy demonstrated yet another strong quarter against the backdrop of digital asset price declines, and I am proud to see the durability and sustained profitability of our operational business lines, including record contributions from our Investment Banking and Mining segments.”
Meanwhile, Galaxy Digital’s announcement comes as the firm is planning to acquire digital asset custodian Bitgo by October 2022.
During the company’s earnings call on Monday, Novogratz noted that the market volatility will continue happening for quite some time, adding that bitcoin will hold around the $30,000 range, with ether’s price will remain around the $2,000 level.
The Galaxy Digital CEO said:
“Crypto probably trades correlated to the Nasdaq until we hit a new equilibrium. My instinct is there’s some more damage to be done, and that will trade in a very choppy, volatile, and difficult market for at least the next few quarters before people are getting some sense that we’re at an equilibrium.”
Novogratz is still bullish about crypto, stating that despite the volatile market, there is an increased institutional investment in the burgeoning sector. Recently, Liechtenstein-based private bank LGT allowed its customers to directly invest in bitcoin and ether.