Galaxy Digital, a cryptocurrency investment firm headed by billionaire Michael Novogratz, has reported losing $111.7 million in the first quarter of the year 2022. The loss is a significant decrease from its $858.2 million gain recorded in the previous years.
Crypto Market Volatility reason behind losses
The aforementioned net loss, as noted in the firm’s quarterly finance report for the month of January 2022, till March, was largely due to the continuous fluctuation in the cryptocurrency market. As the firm explains in the report.
Excerpts from the report reads:
“The decrease was primarily related to unrealized losses on digital assets and on investments in our Trading and Principal Investment businesses, partially offset by profitability in our Investment Banking and Mining businesses and lower operating expenses.”
Additionally, mining and investment banking and mining saw a 775% and 433% upsurge respectively. Capital from the firm’s partners tapped a whopping $2.6 billion, but dipped by 3%, as net long digital positions were hit with severe losses. Partners capital ended up closing at $2.5 billion in the first quarter; a 50% increase from its $1.7 billion close in 2021.
Again, the firm notes that the cryptocurrency market’s 7% dip within the first quarter, is responsible for most of its recorded losses.
Mike Novogratz remains optimistic
On the other hand, the investment banking and mining division, along with the asset management division raked in a noteworthy $0.6 million; a significant addition to net comprehensive income within the same first quarter.
Meanwhile, the firm’s CEO asserts the company’s ability to pull through the bearish clouds, noting the firm’s stability. He is quoted saying:
“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.”
He maintains that the firm will continue to focus on investing by advancing its digital financial services.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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