Galaxy Digital: The Driving Force Behind the Encryption Vault and Diversified Layout

Currently, the cryptocurrency market is bustling with activity, with various assets experiencing astonishing price increases in succession. In this financial narrative, Galaxy Digital, as one of the behind-the-scenes operators, is quietly playing an important role. From asset management to infrastructure development, and from direct investment to structured support, Galaxy is accelerating its compliance transformation and diversification strategy after entering the traditional capital market.

Galaxy becomes an important support for encryption treasury

An increasing number of companies are starting to allocate part of their assets to mainstream cryptocurrencies such as Bitcoin and Ethereum, for use as asset reserves, to hedge against inflation risks, and even to generate financial returns.

Despite market concerns about the leverage levels and debt repayment capabilities of certain encryption financial companies, Galaxy Digital research director Alex Thorn believes these worries are overstated. He pointed out, "In terms of overall scale, the debt levels of these companies are relatively limited, and most of the debt is due in more than two years."

Galaxy is confident in the development trend of encryption finance and has become one of the main driving forces behind this wave of reserves. Whether it is new players allocating encryption assets for the first time or mature enterprises optimizing existing allocations, Galaxy provides comprehensive support for major institutions to launch and expand their encryption treasury operations, covering all aspects from trading, investment, structural design to technical deployment.

Galaxy mainly provides services for two types of enterprise treasury participants:

1. Self-managed enterprises: Can use Galaxy's institutional-grade technology platform to conduct trading, lending, and staking operations independently.
2. Seek custodian management enterprises: You can collaborate with Galaxy Asset Management to obtain comprehensive management strategies and infrastructure support.

According to official disclosures, recently Galaxy has become the preferred partner for over 15 leading companies' encryption treasury projects, such as SharpLink, BitMine, GameSquare, GameStop, AMC, Bit Digital, K Wave Media, TLGY Acquisition Corp, and ReserveOne, providing them with infrastructure, professional services, and end-to-end support. Among them, some partners have committed to investing over $4 billion for encryption asset allocation. In certain cases, Galaxy has also acted as a direct investor, funding from the company's balance sheet to support these enterprises' digital asset strategies.

The customized services of the encryption treasury are becoming one of Galaxy's important sources of revenue. Taking SharpLink Gaming as an example, Galaxy not only invested in the company but also signed an asset management agreement with it, responsible for managing its Ethereum treasury. According to documents from the US SEC, SharpLink is required to pay Galaxy and ParaFi Capital a tiered asset management fee ranging from 0.25% to 1.25% annually, with a minimum of $1.25 million per year. As SharpLink continues to expand its ETH treasury size, Galaxy will also receive continuous and substantial returns.

As institutional staking demand increases, Galaxy is also optimizing related services to achieve greater returns. For example, Galaxy recently partnered with Fireblocks to directly integrate its staking services into the Fireblocks platform for over 2,000 institutional clients. In addition, Galaxy has also collaborated with institutional-grade custodians such as Zodia Custody, BitGo, and Liquid Collective this year to further expand its staking business. According to official sources, as of the first half of this year, Galaxy's staking asset scale reached $3.15 billion.

Accelerating Diversification Strategy After Listing

Mike Novogratz, the founder of Galaxy, stated in the prospectus: "Whether it's institutions or innovators, there is a need for a trustworthy partner to meet the demands of a globalized, digitally connected financial system. Galaxy aims to be the preferred one-stop platform for institutions seeking financial services in the encryption economy."

Galaxy is attempting to respond to the highly volatile and uncertain environment of the encryption market with a more diversified structural strategy. Currently, Galaxy's business architecture mainly revolves around three core sectors: global markets (covering trading and investment banking), asset management, and digital infrastructure solutions (including mining, staking protocol support, and self-custody technology). Among these, trading business is the cornerstone of Galaxy's revenue. In 2024, Galaxy's total revenue is expected to approach $42.6 billion, of which approximately 99% comes from digital asset trading. However, this single structure reveals significant risks during market downturns.

Since the beginning of this year, with the trading activity of non-Bitcoin encryption assets continuing to decline, Galaxy has also been hit hard. By the end of the first quarter, Galaxy reported a net loss of $295 million, mainly due to the drop in encryption asset prices and the shutdown of its Helios data center mining operations. The losses for the quarter nearly consumed the nearly $350 million net income for the entire year of 2024. In addition, by the end of the first quarter, Galaxy's assets under management had significantly shrunk by 29% compared to the previous quarter, falling to $7 billion, which further demonstrates the pressure of market volatility on its asset management business.

Despite the pressure on short-term performance, Galaxy still holds ample funds. As of the end of the first quarter of 2025, the institution holds $1.1 billion in cash and stablecoins, as well as $1.9 billion in equity reserves.

In addition to the encryption treasury business, Galaxy is also expanding other ecological layouts, promoting revenue diversification, and striving to break away from the single dependence on trading business.

In the asset management business, Galaxy expands its layout for encryption ETFs by deeply cooperating with multiple global financial institutions. In the Canadian market, Galaxy launched a Bitcoin ETF in collaboration with CI Financial; in Europe, Galaxy reached a strategic cooperation with German asset management giant DWS to jointly develop encryption asset ETF products for the European market; in the U.S. market, Galaxy, in partnership with the third-largest ETF issuer State Street Global Advisors, launched three actively managed ETFs, with Galaxy Asset Management providing core investment consulting services. At the same time, Galaxy also collaborated with Invesco to launch Bitcoin and Ethereum spot ETFs and submitted an S-1 application to the U.S. SEC for a Solana spot ETF in June this year, further expanding its product line. Additionally, Galaxy's new fund successfully raised $175 million last month, marking its first acceptance of external capital and providing retail investors with a rare opportunity to participate in encryption risk investment portfolios.

In the digital infrastructure sector, Galaxy is building the next-generation AI infrastructure Helios. At the end of May this year, Galaxy issued 29 million shares of its Class A common stock post-IPO, planning to use the net proceeds from this offering to acquire its subsidiary Galaxy Digital Holdings LP, thereby continuing to expand its AI and high-performance computing infrastructure at the Helios data center campus located in the West Texas narrow band. Research institutions have given GLXY a "strong buy" rating, believing that its strategic shift from Bitcoin mining to AI data centers has broad prospects. The institution expects Helios to bring in $1.7 billion in EBITDA and $32 billion in equity value, far exceeding the volatility and high investment of mining operations.

As the cryptocurrency industry gradually moves towards compliance and institutionalization, Galaxy has chosen to embrace the U.S. market. In May of this year, Galaxy, which was originally listed in Canada, completed its restructuring from the Cayman Islands to the United States and officially listed on Nasdaq under the stock code GLXY. Over the past month, GLXY has risen by 55.87%.

Galaxy has paid the price for compliance. At the end of March this year, Galaxy reached a settlement agreement of 200 million USD with the New York Attorney General's Office regarding the manipulation of the LUNA token. The agreement stipulates that Galaxy Digital must pay a fine of 200 million USD over three years, with the first payment of 40 million USD due within two weeks.

Whether as a behind-the-scenes beneficiary of the encryption treasury or in the active expansion of products such as ETF products and AI infrastructure, Galaxy's strategy to address market uncertainty is reflected in its diversified and compliant layout.