Galaxy Digital: The Driving Force Behind the Encryption Treasury and Diversification Strategy

Recently, the cryptocurrency market has been surging with various coins experiencing dramatic increases, attracting the attention of a large number of investors. In this lively market performance, Galaxy Digital is quietly exerting its influence as an important behind-the-scenes player. 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 boost for the encryption treasury

Currently, more and more companies are starting to allocate part of their assets into mainstream encryption currencies such as Bitcoin and Ethereum, for asset reserves, inflation hedging, and even generating additional income. Although there are concerns in the market regarding the leverage levels and debt repayment capabilities of certain crypto financial companies, the research director at Galaxy Digital believes that these worries are clearly exaggerated. He pointed out that, in terms of overall scale, the debt levels of these companies are relatively limited, and most of the debt has a maturity of more than two years.

Galaxy is confident in the development trends of encryption finance and has become one of the behind-the-scenes drivers of this reserve fever. Whether it is new players configuring encryption assets for the first time or mature enterprises optimizing existing configurations, Galaxy provides comprehensive support for major institutions to launch and expand their encryption treasury business, covering various aspects from trading, investment, structural design to technical deployment.

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

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

According to official sources, Galaxy has recently become the preferred partner for over 15 leading companies' encryption treasury projects, providing them with infrastructure, professional services, and end-to-end support. Some partners have committed to investing over $4 billion in encryption asset allocation. In certain cases, Galaxy has also acted as a direct investor, funding these companies' digital asset strategies from its balance sheet.

The customized services of the encryption treasury are also becoming one of Galaxy's important sources of revenue. Taking a certain gaming company as an example, Galaxy not only invested in this company but also signed an asset management agreement with it, responsible for managing its Ethereum treasury. According to documents from the U.S. SEC, the company needs to pay Galaxy and another capital company a tiered asset management fee with an annual rate ranging from 0.25% to 1.25%, with a minimum of 1.25 million dollars per year. As the company continues to expand its ETH treasury size, Galaxy will also receive ongoing and substantial revenue returns.

As the demand for staking from institutions increases, Galaxy is also optimizing related services to achieve more returns. For example, Galaxy recently announced a partnership with a certain encryption custody platform, bringing its staking services directly to over 2,000 institutional clients on that platform. In addition, Galaxy has also collaborated with multiple institutional-grade custody firms this year to further expand its staking business. According to official sources, as of the first half of this year, Galaxy's staking assets have reached $3.15 billion.

Accelerating Diversification Strategy After Listing

Mike Novogratz, the founder of Galaxy, stated that the company aims to become the preferred one-stop platform for institutions seeking financial services in the encryption economy. In fact, Galaxy is trying to respond to the highly volatile and uncertain environment of the encryption market with a more diversified structural strategy.

Currently, Galaxy's business structure primarily revolves around three core sectors: global markets (including 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 close to $42.6 billion, of which approximately 99% comes from digital asset trading business. However, this singular structure exposes significant risks during market downturns.

In the first quarter of this year, Galaxy reported a net loss of $295 million, primarily due to the decline in encryption asset prices and the shutdown of a mining operation at a certain data center. The quarterly loss nearly consumed the nearly $350 million net income for the entire year of 2024. Additionally, 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, reflecting the pressure that the volatility in the encryption market has placed 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 has $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 its other ecological layout, promoting revenue diversification, and striving to break away from single-point dependence on trading business. In the asset management sector, Galaxy is expanding its layout in encryption ETFs through in-depth cooperation with multiple global financial institutions. In the Canadian, European, and American markets, Galaxy has partnered with well-known asset management companies to launch various encryption asset ETF products.

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 going public, planning to use the net proceeds from this issuance 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 West Texas.

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. In the past month, GLXY has increased by 55.87%.

In order to clear compliance obstacles and achieve a smooth transformation, Galaxy is willing to pay a huge sum to settle old cases. At the end of March this year, Galaxy reached a settlement agreement of $200 million with the New York Attorney General's Office regarding a manipulation case involving a certain token.

Whether as a behind-the-scenes beneficiary of encryption treasury or actively expanding in areas such as ETF products and AI infrastructure, Galaxy's strategic intention to cope with market uncertainties through diversified and compliant layouts is evident.