Broker Canaccord Genuity stated in a report on Tuesday following the crypto financial services company’s first-quarter results that Galaxy Digital (GLXY) is evolving its business in a deliberate and methodical manner, and even though the regulatory environment is still difficult, the company’s opportunity set and competitive positioning remain compelling.
The CEO of the Toronto-based company, Mike Novogratz, claimed that net income increased by 40% to $422 million in the previous quarter, and the broker predicted that the upward trend would continue.
Analysts under Joseph Vafi commented, “We are encouraged to see solid progress in growth and maturation in each of the company’s three operating units coming into view over the next few quarters.”
According to the study, Galaxy Trading increased its total number of counterparties from 1,052 in the fourth quarter to 1,161 in the first, and its counterparty trading revenue increased by 79% to $66 million. The development was prompted by the approval of spot bitcoin (BTC) exchange-traded funds (ETFs) in January. “As some of the more traditional asset managers and hedge funds are entering/reentering the space, spot bitcoin ETF approvals have been a major catalyst for the increase in counterparty engagement,” the authors stated.
According to the letter, GalaxyOne also experienced growth, with more than $1 billion in assets and over 75 institutional clients on the platform. “The company can offer its full suite of products, including custody, lending, spot trading, hedging, and derivatives, to this excellent group of customers.” According to Canaccord, the asset-management industry also saw strong momentum, concluding the quarter with assets under management (AUM) of $7.8 billion, up 50% from the previous quarter.
The report also stated that Galaxy is “continuing to grow its infrastructure and GK8 business, growing its assets under stake by 100% quarter-over-quarter to $486m.” In February of last year, the company paid $44 million to acquire the self-custody platform GK8.
Additionally, the company raised its own mining hashrate, and the broker noted that the Helios facility “presents an opportunity for Galaxy to pursue both mining and AI hosting over time.” For Galaxy shares, Canaccord has a buy rating and a C$17 price target. On Tuesday, the shares finished at C$12.41.