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Galaxy Digital suffers a loss of $300 million in this quarter

Galaxy Digital
TL;DR Breakdown
  • Galaxy Digital expects a significant cut in its net comprehensive income.
  • Despite LUNA and UST’s crash, Galaxy Digital holds liquidity of $1.60 billion.
  • The CEO, Michael Novogratz experiences asset devaluation amid LUNA’s dip.
  • Novogratz expects a further downtrend from the market.

Galaxy Digital lost money in the first quarter due to falling cryptocurrency prices, which led the company to incur unrealized trading losses. The recent events in the crypto space have led to some severe outcomes for investors and even crypto-related firms. The downfall of several cryptocurrency tokens has caused frustrating conditions. Moreover, the 99% crash posted by Terra LUNA has set a horrific example for the crypto community. Investors and firms linked with LUNA’s investments have lost their portfolio’s worth.

A similar dilemma was observed by Galaxy Digital Holdings Ltd. The organization is expecting a hit of around $300 million in its quarter-to-date loss. The company master in offering crypto-related services to its consumers. Therefore, its business is going down because of the plunging digital asset industry.

Galaxy Digital updates capital and liquidity positions

Galaxy Digital released an update on its expected quarterly net comprehensive income. This income covers a company’s net income and any of its expected profits or loss. Through this anticipated degradation, the total equity of the firm would be brought down to $2.20 billion. The organization stated that it will be a potential degradation of 12% in comparison with the stats of March 31, 2022. However, Galaxy Digital did not comment any further on the issue.

Galaxy Digital broke the news at a time when LUNA and Terra’s stablecoin, UST, are suffering from a price dump. Many consumers anticipated that it had something to do with wiping out the firm’s equity. However, Galaxy Digital cleared that it does not make use of algorithmic stablecoins. Moreover, the firm says that it maintains a solid capital and liquidity position. As of now, Galaxy Digital has liquidity of about $1.60 billion. It includes $800 million in cash and about $800 million in virtual assets.

In the released update, Galaxy Digital further clarified that Galaxy Digital Trading suffered from no disruptions at the operational level. Its average collateralization remains over a hundred percent, and all of its other products are performing smoothly.

However, GLXY shares that are listed on the Toronto exchange suffered degradation of 43% from their value at the time of the first-quarter report. The share is valued around the $7.70 mark. At the start of this week, the company reported that it faced a loss of $111.70 million in the first quarter. A year ago, the company had gained $858.20 million for the same quarter. This indicated that Galaxy Digital is suffering in light of the recent events that are shaping the market.

Michael Novogratz experiences a significant loss in his fortune

The CEO of Galaxy Digital, Michael Novogratz has seen a major devaluation of his assets. Being a crypto billionaire, Novogratz was also a staunch supporter of Terra USD. His assets have plunged to $2.50 billion. They were previously valued at around $8.50 billion in November. Novogratz also shared his views on market volatility. Novogratz expects a further downtrend from the market.

He explained that the market is expected to maintain its volatility and difficulty for a few quarters. He also made a point that increasing the correlation between cryptos and US equities will not allow the market to structure a strong comeback soon. Not only this, Novogratz predicted that the market is bound to experience some more damage, and this is not the lowest for the crypto industry.

Michael Novogratz and his firm were early supporters of the Terra blockchain. He has come out in support of the LUNA token numerous times. His previous tweets show that Novogratz had high hopes for the token. Nonetheless, the coin was true to these hopes until the start of this week. It has been a challenging week for the Terra community, including Michael Novogratz.

Muhammad Ali

Muhammad Ali

Muhammad Ali is an expert on crypto investments. Loving to write about fintech, he joins the team to provide detailed analyses of the hottest crypto news.

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