The business behind the crypto treasury, Galaxy Digital’s move to the U.S. stock market

avatar
PANews
1 days ago
This article is approximately 1471 words,and reading the entire article takes about 2 minutes
From asset management services to infrastructure construction, from direct investment to structured support, Galaxy is accelerating its compliance transformation and diversification strategy after entering the traditional capital market.

Original author: Nancy, PANews

At present, various cryptocurrency stocks are competing to pull up the market, taking turns to stage a surge show to compete for market attention. Unlike the players in front of the stage who are openly competing, Galaxy Digital is one of the behind-the-scenes operators of this treasury narrative. In fact, from asset management services to infrastructure construction, from direct investment to structured support, Galaxy is accelerating its compliance transformation and diversification strategy after landing in the traditional capital market.

Galaxy launches two types of customized services, becoming the driving force behind the crypto treasury

Currently, more and more companies are allocating part of their assets to mainstream cryptocurrencies such as Bitcoin and Ethereum for asset reserves, inflation hedging, and even to create financial returns.

Although the market is concerned about the leverage level and debt repayment ability of some crypto finance companies, Alex Thorn, head of research at Galaxy Digital, recently pointed out that these concerns are obviously exaggerated. He said, In terms of overall size, the debt volume of these companies is relatively limited, and most of the debts will mature in the next two years or more.

Galaxy is the driving force behind this reserve craze, with its confidence in the evolution of crypto finance. Whether it is a new entrant who is allocating crypto assets for the first time or a mature enterprise optimizing its existing allocation, Galaxy is providing all-round support from trading, investment, structure design to technology deployment for major institutions to start and expand their crypto treasury business.

It is reported that Galaxy mainly provides services for two types of corporate treasury participants: (1) self-managed enterprises: they can use Galaxys institutional-grade technology platform to conduct transactions, lending and pledge operations on their own; (2) enterprises seeking custodial management: they can cooperate with Galaxy Asset Management to obtain comprehensive management strategies and infrastructure support.

According to official disclosures, in the past few weeks, Galaxy has become the preferred partner for over 15 leading companies’ crypto 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 pledged to invest over $4 billion in crypto assets. In some cases, Galaxy also supports these companies’ digital asset strategies by investing from the company’s balance sheet as a direct investor.

The business behind the crypto treasury, Galaxy Digital’s move to the U.S. stock market

Customized services for crypto treasuries are also becoming one of Galaxys important sources of income. Taking SharpLink Gaming as an example, Galaxy not only invested in the company, but also signed an asset management agreement with it to manage its Ethereum treasury. According to US SEC documents, SharpLink is required to pay Galaxy and ParaFi Capital a tiered asset management fee ranging from 0.25% to 1.25% per year, with a minimum of $1.25 million per year. As SharpLink continues to expand the size of its ETH treasury, Galaxy will also receive sustained and substantial returns.

What’s more worth mentioning is that as the demand for staking by institutions increases, Galaxy is also optimizing related services to achieve more benefits. For example, not long ago, Galaxy announced a partnership with Fireblocks to directly introduce its staking services to more than 2,000 institutional clients on the Fireblocks platform. In addition, Galaxy also cooperated with institutional-level custodians 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, the scale of Galaxy’s pledged assets reached US$3.15 billion.

The loss in the first quarter swallowed up the profit for the whole year, and the diversification strategy was accelerated after the listing

Both institutions and innovators need a trusted partner to meet the needs of a globalized, digitally connected financial system. Galaxy aims to become the preferred one-stop platform for institutions seeking financial services in the crypto economy, said Galaxy founder Mike Novogratz in the prospectus.

In fact, Galaxy is trying to cope with the highly volatile and uncertain crypto market environment with a more diversified structural strategy. At present, Galaxys business structure mainly revolves around three core sectors: global markets (covering trading and investment banking), asset management, and digital infrastructure solutions (including mining, pledge agreement support and self-custody technology). Among them, the trading business is the cornerstone of Galaxys revenue. According to the prospectus, Galaxys total revenue in 2024 will be close to US$42.6 billion, of which about 99% will come from digital asset trading business. However, this single structure exposes significant risks in the market downturn cycle.

The business behind the crypto treasury, Galaxy Digital’s move to the U.S. stock market

This year, as the trading activity of non-Bitcoin crypto assets has continued to decline, Galaxy has also been hit hard. As of the first quarter, Galaxy had a net loss of $295 million, mainly due to the decline in crypto asset prices and the closure of the Helios data center mining business. The loss in this quarter almost swallowed up the nearly $350 million in net income for the whole year of 2024. In addition, as of the end of the first quarter, Galaxys asset management scale shrank by 29% from the previous quarter to $7 billion, which further demonstrated the pressure of crypto market volatility on its asset management business.

Despite the short-term performance pressure, Galaxy still has plenty of bullets. As of the end of the first quarter of 2025, the institution held $1.1 billion in cash and stablecoins, and $1.9 billion in equity reserves.

In addition to the crypto treasury business, Galaxy is also currently expanding its other ecological layouts to promote revenue diversification and strive to get rid of its single-point dependence on trading business.

For example, in the asset management business, Galaxy has expanded its layout of crypto ETFs through in-depth cooperation with multiple global financial institutions. As early as in the Canadian market, Galaxy joined hands with CI Financial to launch the Bitcoin ETF, helping the rapid implementation of compliant crypto investment products in North America; in Europe, Galaxy reached a strategic cooperation with German asset management giant DWS to jointly develop crypto asset ETF products for the European market; in the US market, Galaxy has jointly launched three actively managed ETFs with the third largest ETF issuer State Street Global Advisors, and Galaxy Asset Management provides core investment consulting services. At the same time, Galaxy also cooperated with Invesco to launch Bitcoin and Ethereum spot ETFs, and submitted the S-1 application documents for Solana spot ETF to the US SEC in June this year to further expand its product line. In addition, Galaxys new fund successfully raised US$175 million last month. This is the first time it has accepted external capital, providing retail investors with a rare opportunity to participate in crypto risk investment portfolios.

The business behind the crypto treasury, Galaxy Digital’s move to the U.S. stock market

For another example, 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 after its listing, and planned to use the net proceeds from the sale of this offering to acquire its subsidiary Galaxy Digital Holdings LP, thereby continuing to expand its artificial intelligence and high-performance computing infrastructure at the Helios data center park in the panhandle of West Texas. Previously, Rittenhouse Research also gave GLXY a strong buy rating, citing its strategy of fully transforming from Bitcoin mining to AI data centers. Rittenhouse expects Helios to bring $1.7 billion in EBITDA and $32 billion in equity value, far exceeding the volatility and high investment of the mining business.

In addition, as the cryptocurrency industry gradually moves towards compliance and institutionalization, Galaxy has chosen to embrace the US market in terms of compliance. In May of this year, Galaxy, which was originally listed in Canada, completed the reorganization of relocating from the Cayman Islands to the United States and officially listed on the Nasdaq with the stock code GLXY. The market shows that GLXY has risen by 55.87% in the past month.

The business behind the crypto treasury, Galaxy Digital’s move to the U.S. stock market

Galaxy is working hard to make money and is also paying tuition for compliance. Previously, in order to clear compliance obstacles and achieve a smooth transformation, Galaxy paid huge sums of money to settle old cases. At the end of March this year, Galaxy reached a $200 million settlement agreement with the New York Attorney Generals Office (NY AG) on the LUNA token manipulation case (earning hundreds of millions of dollars in huge profits before LUNA collapsed). The agreement stipulates that Galaxy Digital must pay a fine of $200 million within three years, of which the first $40 million will be paid within two weeks.

Whether as a behind-the-scenes profiteer of crypto treasury or actively expanding products such as ETF products and AI infrastructure, Galaxys intention to cope with market uncertainties through diversified and compliant layouts is evident behind the scenes.

Original article, author:PANews。Reprint/Content Collaboration/For Reporting, Please Contact report@odaily.email;Illegal reprinting must be punished by law.

ODAILY reminds readers to establish correct monetary and investment concepts, rationally view blockchain, and effectively improve risk awareness; We can actively report and report any illegal or criminal clues discovered to relevant departments.

Recommended Reading
Editor’s Picks