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

Currently, the price fluctuations of various encryption assets in the market are striking. Behind the narrative of financial resources, Galaxy Digital is playing an important role as a key operator. With the entry of traditional capital markets, the company is accelerating its compliance transformation and diversification strategy.

Galaxy becomes the driving force behind the encryption treasury.

An increasing number of companies are beginning to allocate part of their assets to mainstream cryptocurrencies such as Bitcoin and Ethereum for asset reserves, inflation hedging, and even generating financial returns. Although the market has doubts about the leverage levels and debt repayment capabilities of certain cryptocurrency financial companies, Galaxy Digital's research head Alex Thorn believes these concerns are significantly exaggerated. He pointed out that, in terms of overall scale, the debt levels of these companies are relatively limited, and most of the debt matures in more than two years.

Galaxy is confident in the evolution trend of encryption finance and actively promotes this wave of reserve enthusiasm. Whether it is new entrants allocating encryption assets for the first time or mature enterprises optimizing existing allocations, Galaxy provides comprehensive support for launching and expanding encryption treasury operations, covering all 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 trading, lending, and staking operations independently.

2. Seek custodian management companies: You can collaborate with Galaxy Asset Management to obtain comprehensive management strategies and infrastructure support.

According to official disclosure, Galaxy has recently become the preferred partner for over 15 leading companies' encryption treasury projects, such as SharpLink, BitMine, GameSquare, and others. These partners have committed to invest over $4 billion in encryption assets. In certain cases, Galaxy has also supported these companies' digital asset strategies as a direct investor.

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 relevant documents, SharpLink needs to pay Galaxy a tiered asset management fee with an annual rate ranging from 0.25% to 1.25%, with a minimum of $1.25 million per year.

With the increasing demand for staking from institutions, Galaxy is also optimizing related services to achieve greater returns. The company has collaborated with several institutional-grade custodians to further expand its staking business. According to official sources, as of the first half of this year, Galaxy's staking asset scale has 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. To cope with the high volatility and high uncertainty of the encryption market environment, Galaxy is adopting a more diversified structural strategy.

Currently, Galaxy's business architecture mainly revolves around three core sectors: the global market ( covering trading and investment banking ), asset management, and digital infrastructure solutions ( including mining, staking protocol support, and self-custody technology ). Among them, trading business is the revenue cornerstone of Galaxy. 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 the Helios data center mining operations. The quarterly loss nearly wiped out the nearly $350 million in net income from the entire previous year. 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.

Despite the pressure on short-term performance, Galaxy still holds ample funds. As of the end of the first quarter of this year, 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 its other ecological layout, promoting revenue diversification, and striving to break free from the single-point dependence on trading business:

1. Asset Management Business: Galaxy expands its layout for encryption ETFs by collaborating with multiple global financial institutions. In the North American, European, and U.S. markets, Galaxy has partnered with several well-known asset management companies to launch various encryption asset ETF products.

2. Digital Infrastructure: Galaxy is building the next generation AI infrastructure Helios. The company plans to use the net proceeds from its recent stock issuance to continue expanding its AI and high-performance computing infrastructure at the Helios data center campus located in West Texas.

3. Compliance Process: In May of this year, Galaxy 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%.

To clear compliance obstacles and achieve a smooth transition, Galaxy is willing to pay a huge amount of money to settle past cases. At the end of March this year, Galaxy reached a settlement agreement of 200 million USD with the relevant authorities regarding the manipulation case of the LUNA token.

Whether as a behind-the-scenes beneficiary of the encryption treasury or actively expanding in areas such as ETF products and AI infrastructure, Galaxy demonstrates its determination to respond to market uncertainties through diversified and compliant strategies.