Galaxy Digital reports $46 million loss in the second quarter

Galaxy Digital founder Mike Novogratz’s net loss in the second quarter stood at $46 million, compared with a profit of $134.2 million in the prior period, according to a press release.

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The firm’s trading revenue declined by 54% to $59.5 million.

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Asset management revenue amounted to $33.8 million, up 619% from the first quarter. AUM of Galaxy Asset Management stood at roughly $2.5 billion. About $1.4 billion is allocated to venture strategies, and the firm’s portfolio includes 217 companies.

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Mining revenue amounted to $15.4 million, up 51%. The growth was driven by higher income from the company’s own mining operations.

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Galaxy ended the quarter with a hashrate of around 3.7 EH/s, more than 20% higher than in the prior period. About 45% of capacity is devoted to in-house mining.

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The company maintained average production costs for mining a single Bitcoin in the range of $9,000–$10,000. However, these figures do not include corporate overhead and depreciation of equipment.

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The overall negative quarterly results at Galaxy were attributed to lower realized profits from digital assets and unrealized losses on investments. Nevertheless, founder and CEO Mike Novogratz said the business had delivered solid operating results.

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During the quarterly earnings call, he referenced the late-1990s hit Tubthumping to buoy investors.

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“There was a song from the band Chumbawamba in the late 1990s. ‘I get knocked down, but I get up again.’ And that, I think, is the spirit of cryptocurrencies,” he said.

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Novogratz also pointed to recent industry events that signal a softening of negative factors for the crypto industry.

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“I joked that I went to bed every night and whispered prayers for four things: that the US Federal Reserve System would move toward an easing cycle, ETF would be approved, Ripple will win its case and these funds would be settled with regulators. And we’ve made substantial progress on three of those four wishes, haven’t we?” he said.

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In 2022, Galaxy Digital’s net loss stood at $1 billion.