Cryptocurrency funding supervisor Galaxy Digital Holdings reported a pointy loss within the first quarter on account of unrealized losses in its digital asset portfolio, underscoring heightened volatility within the digital asset sector in 2022.
The firm did report aggregate profitability for its asset management, investment banking and mining operations. Investment banking and mining posted record revenue and net comprehensive income during the quarter.
Assets under management held by Galaxy Digital Asset Management declined 5% during the quarter to $2.7 billion.
Galaxy’s declining profitability in the first quarter reflected extreme volatility in the digital asset market as Bitcoin (BTC) and altcoins experienced multiple large drawdowns. The market appears to be entering a capitulation phase in May due to Bitcoin’s strong correlation with other risk-on assets.
Risk assets, including crypto, have nosedived ever since the United States Federal Reserve and other central banks decided to aggressively pursue rate hikes to combat soaring inflation. Last week, the Fed hiked interest rates by 50 basis points, marking the largest upward adjustment in over two decades.
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Galaxy Digital, a crypto investment manager, founded by Mike Novogratz, is set to acquire institutional custodian service and wallet operator BitGo for $1.2 billion. https://t.co/QinaTE3PRE
— Cointelegraph (@Cointelegraph) May 5, 2021
Regardless of market volatility, crypto fund managers and enterprise capitalists proceed to make massive, strategic investments within the area. Galaxy plans to finalize its aquisition of BitGo later this yr after first saying its intent to purchase the digital asset custodian in Might 2021. In the meantime, enterprise capital funding in crypto and blockchain initiatives reached a file excessive within the first quarter.
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