Given the recent performance of the crypto market, Galaxy Digital Holdings could lose up to $300 million in net comprehensive income this quarter.
A company’s comprehensive income is usually the sum of its net income and profit or loss so far. As we approach the end of the second quarter, this recent news appears to be a warning sign for investors.
Losing $300 million would reduce “Partners Capital by $2.2 billion, a 12% drop compared to March 31, 2022”. The company said it currently has a liquidity position of $1.6 billion, “which includes $800 million in cash and over $800 million in net digital assets.”
The firm claims that in light of the recent price crash of Terra’s algorithmic stablecoin UST, most of its digital assets are held in non-algorithmic stablecoins, clarifying that its Treasury does not use algorithmic stablecoins.
The Galaxy Digital update is not surprising as the crypto market has lost almost 40% of its value in the past seven days. The market cap of the crypto industry fell below $1.5 trillion and the value of bitcoin also fell below $30,000, with other major altcoins also seeing a significant drop in their value.
Most publicly traded crypto companies have also seen their shares fall. To date, most of the top publicly traded crypto-related companies have lost over 50% of their value year to date. This includes Coinbase, MicroStrategy, Marathon Digital Holdings and Galaxy Digital Holdings.
The update comes just five days after it released its Q1 report, where it reported a loss of $111.7 million. It then said that these are unrealistic losses on the digital asset and its trading and investment business.
At the time, the CEO, Mike Novogratz, said that he was not concerned about the market and predicted that Bitcoin would be around $30,000 while ETH would be around $2,000.
While the firm itself has not been exposed to the Terra ecosystem, Novogratz himself is a big fan of the asset because of a tattoo of the coin on his arm.
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