Mike Novogratz's Galaxy Digital Registers Profit after Heavy Loss Last Year

Despite several headwinds in 2022, Novogratz said that the company continues to lead from a position of strength, remaining open for business for our clients and counterparties.

On Tuesday, March 28, Canadian investment firm Galaxy Digital, operated by Wall Street veteran Mike Novogratz, reported a pre-tax profit of $150 million from January 1, 2023, through March 24, 2023. This is a major sign of optimism for the crypto firm which reported $1 billion in net losses for the last year 2022. Also, the company had attributed this loss to a $ 496 million unrealized loss on investments and a $ 659 million unrealized loss on digital assets.

Commenting on the first quarter results, Galaxy Digital chairman Mike Novogratz said:

“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. I have never been more confident in our go-forward strategy, businesses, and team. The Company continues to lead from a position of strength, remaining open for business for our clients and counterparties”.

Galaxy digital faced some of the major losses of 2022 with the $40 billion collapse of the Terra ecosystem. On May 19, 2022, just after the Terra collapse, Novogratz said that he was “permanently humbled” with the Terra fall while reiterating that the crypto industry “looks stronger than ever and wouldn’t be going away any time soon”.

Shift of Plans for Galaxy Digital in 2022

2022 witnessed one of the harshest crypto winters in the history of the crypto market. The first major collapse of Terra spread like a contagion in the broader crypto market with popular crypto lenders like Celsius Network and Voyager Digital collapsing soon after. Furthermore, a $3 billion crypto hedge fund also collapsed overnight during the same time.

As a result, Galaxy Digital had to pivot from its previous plans. Back in August 2022, the company decided to cancel its IPO plans and also terminated its $100 million deal of acquiring digital asset custodian BitGo. Later in November, Galaxy Digital also disclosed $77 million in exposure to now bankrupt crypto exchange FTX, of which $48 million are locked in withdrawal.

However, despite these many setbacks, Mike Novogratz said that the company has strong liquidity positions of $957 million. The veteran investor also continues to stay bullish on Bitcoin and other digital assets. In one of his recent tweets, Novogratz wrote:

“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.”

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.