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

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 Luna 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 Luna protocol. Galaxy Digital reported a net income of $1.7 billion in 2021 during the height of the crypto bull market. 

In August 2022, Galaxy Digital reportedly dropped its plans to go public in the U.S. 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 says the firm has a strong liquidity position of $957 million. Among other items, the company projects its subsidiary Galaxy Mining will grow its Bitcoin (BTC) mining hash rate to 4 exahash 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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