Strong Q3 Performance Drives Stock Rally
Galaxy Digital shares experienced significant gains this week following the release of their third-quarter financial results. The institutional crypto firm reported $505 million in profits during the quarter, which caught investor attention and drove trading activity. The stock jumped to $46 at market open on Monday before settling around $43, representing an 8.3% increase for the day.
What’s particularly interesting is how the company’s platform assets grew substantially. They reached a record $17 billion in assets during the third quarter, which marks a 70% increase compared to the previous quarter. That kind of growth doesn’t happen by accident, and it suggests the company is finding its footing in a competitive market.
Trading Volume and Revenue Surge
The trading volume numbers tell an even more compelling story. Galaxy disclosed that trading volumes increased by 140% quarter-over-quarter. That’s a massive jump that reflects growing confidence in their platform. The firm also reported $28.4 million in third-quarter revenue, which represents a 231% increase from the same period last year.
One notable transaction that contributed to these figures was a $9 billion notional Bitcoin sale that Galaxy facilitated earlier this year. While that’s certainly a large transaction, it’s worth noting that the overall growth appears to be more than just one-off deals.
Expanding Client Base and Services
Galaxy seems to be benefiting from the proliferation of crypto treasury firms on Wall Street. The company reported that these firms have parked $4.5 billion in assets at Galaxy, which is no small amount. As a result of this activity, Galaxy expects to generate around $40 million in annual recurring fees, which provides some revenue stability.
The company’s GalaxyOne platform, which launched this month, aims to compete with retail-focused platforms like Robinhood and Coinbase by allowing customers to trade both stocks and crypto in one place. At the same time, they’re targeting accredited investors with specialized products like high-yield cash accounts that aren’t universally available.
Broader Business Operations
Beyond their core financial services, Galaxy maintains $9 billion in assets under management and another $7 billion in “assets under stake” that were earning blockchain rewards. Their average loan book size increased to $1.8 billion, reflecting both growth and increased client diversity.
Interestingly, the company is also involved in data center infrastructure. They mentioned remaining on schedule to deliver power to AI cloud computing platform CoreWeave in the first half of next year, which suggests they’re thinking about multiple revenue streams.
Analysts at Compass Point noted that Galaxy’s earnings before interest and taxes came in 236% above Wall Street estimates. They suggested that the increase in assets on Galaxy’s platform will likely cause investors to adjust their forecasts higher. While one quarter doesn’t make a trend, these numbers certainly suggest the company is heading in the right direction.
