Cryptocurrency investment firm Galaxy Digital is seeking to bolster its financial position through the acquisition of assets from struggling crypto companies. This new focus comes after Galaxy Digital was assigned the management of FTX’s crypto assets for debt settlement, tripling its assets under management from $1.7 billion to $5.4 billion.
Following court approval to sell off FTX’s crypto assets, Galaxy Digital, which faced significant losses in recent months, is exploring the possibility of acquiring other assets from FTX’s extensive real estate and venture capital portfolio. Among these assets is an investment in Anthropic, a competitor to OpenAI.
The positive impact Galaxy Digital could experience after the FTX mandate is highlighted by Andrew Bond of Rosenblatt Securities, who notes that this situation opens the door for additional mandates that could be more profitable.
Galaxy Digital is Making Strides in Recovering From the 2022 Collapse
In financial terms, Galaxy Digital reported a loss of $94 million in the third quarter, struggling to recover from the market collapse in 2022. Although it faced a $77 million loss due to the FTX collapse, it successfully made several investments in other crypto companies, such as Fireblocks and Polygon Labs. It is noteworthy that Binance declined to acquire FTX assets in November of last year.
Galaxy Digital is actively involved in trading and investment banking. It is currently collaborating on the quest for a Bitcoin exchange-traded fund (ETF) in partnership with the CME Group and Invesco. It is awaiting a positive decision from the SEC regarding its proposal, which analysts believe will occur in mid-January 2024. Additionally, it has partnered with Deutsche Bank’s DWS Group and Flow Traders, a Dutch market maker, to launch a euro-backed stablecoin.
Following the wave of bankruptcies in the crypto space, several companies are facing highly complex economic situations. Companies like Celsius and BlockFi have obtained judicial approval to initiate payments to their creditors and undergo restructuring processes. It will be necessary to closely monitor their evolution to see if they reach a successful resolution. FTX is on a similar path and recently proposed to pay cash to the customers it owes compensation to.
