Galaxy Digital becomes the behind-the-scenes operator of the listed encryption treasury; what hidden business secrets lie behind its transition to the US stock market?

Author: Nancy, PANews

At present, various cryptocurrencies and stocks are competing to rally, showcasing surges in turn to capture market attention. Unlike the front-stage players who openly compete, Galaxy Digital is one of the behind-the-scenes operators of this financial narrative. In fact, from asset management services to infrastructure development, and from direct investment to structured support, Galaxy is accelerating its compliance transformation and diversification strategy after entering the traditional capital market.

launched two types of customized services, with Galaxy as the behind-the-scenes driver of the crypto vault.

Currently, more and more companies are allocating part of their assets to mainstream cryptocurrencies like Bitcoin and Ethereum for asset reserves, inflation hedging, and even generating financial returns.

Despite concerns in the market regarding the leverage levels and debt repayment capabilities of some crypto financial companies, Alex Thorn, head of research at Galaxy Digital, recently pointed out that these concerns are significantly exaggerated. He stated, "In terms of overall scale, the debt volume of these companies is relatively limited, and most of the debt is due in more than two years."

Behind Galaxy's confidence in the evolution of crypto finance trends is its role as a driving force behind this reserve wave. Whether it is new entrants making their first allocations in crypto assets or mature enterprises optimizing their existing allocations, Galaxy is providing comprehensive support for major institutions to initiate and expand their crypto treasury operations, including trading, investment, structural design, and technical deployment.

It is reported that Galaxy primarily provides services for two types of enterprise treasury participants: (1) Self-managed enterprises: they can use Galaxy's institutional-grade technology platform to conduct trading, lending, and staking operations independently; (2) Enterprises seeking custodial management: they can collaborate with Galaxy Asset Management to obtain comprehensive management strategies and infrastructure support.

According to official disclosure, over the past few weeks, Galaxy has become the preferred partner for the crypto treasury projects of more than 15 leading companies, such as SharpLink, BitMine, GameSquare, GameStop, AMC, Bit Digital, K Wave Media, TLGY Acquisition Corp, and ReserveOne, providing them with infrastructure, professional services, and end-to-end support. Among them, some partners have already committed over $4 billion in funding for crypto assets. In some cases, Galaxy has also acted as a direct investor, funding these companies' digital asset strategies from its own balance sheet.

The customized services of the crypto treasury are also becoming one of the important sources of income for Galaxy. Taking SharpLink Gaming as an example, Galaxy not only invested in the company but also signed an asset management agreement with it, responsible for managing its Ethereum treasury. According to documents from the U.S. SEC, SharpLink is required to pay Galaxy and ParaFi Capital a tiered asset management fee with an annual rate ranging from 0.25% to 1.25%, with a minimum of $1.25 million per year. As SharpLink continues to expand the scale of its ETH treasury, Galaxy will also receive continuous and substantial returns.

It is worth mentioning that, as the demand for staking from institutions increases, Galaxy is also optimizing its related services to achieve more profits. For example, not long ago, Galaxy announced a partnership with Fireblocks, integrating its staking services directly into the Fireblocks platform for over 2,000 institutional clients. In addition, this year, Galaxy has also partnered with institutional custody providers such as Zodia Custody, BitGo, and Liquid Collective to further expand its staking business. According to official sources, as of the first half of this year, Galaxy's staking assets have reached $3.15 billion.

The loss in the first quarter has consumed the annual profit, accelerating the diversification strategy after going public.

"Whether it's institutions or innovators, there is a need for a trusted partner to meet the demands of a globalized, digitally connected financial system. Galaxy aims to be the preferred one-stop platform for institutions seeking financial services in the crypto economy," said Galaxy founder Mike Novogratz in the prospectus.

In fact, Galaxy is attempting to respond to the highly volatile and uncertain environment of the cryptocurrency market with a more diversified structural strategy. Currently, Galaxy's business architecture primarily revolves around three core sectors: global markets (covering trading and investment banking), asset management, and digital infrastructure solutions (including mining, staking protocol support, and self-custody technology). Among these, trading is the cornerstone of Galaxy's revenue. According to the prospectus, Galaxy's total revenue in 2024 is expected to approach $42.6 billion, with approximately 99% coming from digital asset trading. However, this single structure exposes significant risks during market downturns.

Since the beginning of this year, as the trading activity of non-Bitcoin cryptocurrency assets continues to decline, Galaxy has also been hit hard. By the end of the first quarter, Galaxy reported a net loss of $295 million, primarily due to the drop in cryptocurrency asset prices and the shutdown of its Helios data center mining operations. This quarterly loss nearly wiped out almost $350 million of net income for the entire year of 2024. Additionally, by the end of the first quarter, Galaxy's asset management scale had significantly shrunk by 29% compared to the previous quarter, decreasing to $7 billion, further highlighting the pressure of market volatility on its asset management business.

Although short-term performance is under pressure, Galaxy still has ample ammunition. As of the end of Q1 2025, the institution holds $1.1 billion in cash and stablecoins, as well as $1.9 billion in equity reserves.

In addition to the cryptocurrency vault business, Galaxy is currently expanding its other ecological layout, promoting revenue diversification, and striving to break free from its single-point reliance on trading operations.

For example, in the asset management business, Galaxy has expanded its layout on crypto ETFs through deep cooperation with multiple global financial institutions. As early as in the Canadian market, Galaxy partnered with CI Financial to launch a Bitcoin ETF, facilitating the rapid introduction of compliant crypto investment products in North America; in Europe, Galaxy reached a strategic cooperation with the German asset management giant DWS to jointly develop crypto asset ETF products for the European market; in the U.S. market, Galaxy has even partnered with the third-largest ETF issuer State Street Global to launch three actively managed ETFs, with Galaxy Asset Management providing core investment advisory services. At the same time, Galaxy also collaborated with Invesco to launch Bitcoin and Ethereum spot ETFs, and submitted an S-1 application for a Solana spot ETF to the U.S. SEC in June this year, further expanding its product line. Additionally, Galaxy's new fund successfully raised $175 million last month, marking its first acceptance of external capital and providing retail investors with a rare opportunity to participate in a crypto risk investment portfolio.

For example, in the digital infrastructure sector, Galaxy is building the next-generation AI infrastructure Helios. At the end of May this year, Galaxy issued 29 million shares of its Class A common stock post-IPO, planning to use the net proceeds from this offering to acquire its subsidiary Galaxy Digital Holdings LP, thereby continuing to expand its AI and high-performance computing infrastructure at the Helios data center campus located in the narrow strip of West Texas. Previously, Rittenhouse Research also gave GLXY a "strong buy" rating, citing its strategic shift from Bitcoin mining to AI data centers. Rittenhouse expects Helios to bring in $1.7 billion in EBITDA and $32 billion in equity value, far exceeding the volatility and high investment of the mining business.

Additionally, as the cryptocurrency industry gradually moves towards compliance and institutionalization, Galaxy has chosen to embrace the U.S. market in its compliance process. In May of this year, Galaxy, which was originally listed in Canada, completed its restructuring from the Cayman Islands to the United States and was officially listed on Nasdaq under the stock code GLXY. Market data shows that GLXY has risen by 55.87% in the past month.

Galaxy is also making efforts to earn money by "paying tuition" for compliance. Previously, to clear compliance barriers and achieve a smooth transition, Galaxy did not hesitate to pay a huge amount of money to settle old cases. At the end of March this year, Galaxy reached a settlement agreement of $200 million with the New York Attorney General's Office (NY AG) regarding the manipulation of the LUNA token (which made hundreds of millions of dollars in profits before the LUNA crash). The agreement stipulates that Galaxy Digital must pay a $200 million fine within three years, with the first payment of $40 million due within two weeks.

Whether as a behind-the-scenes beneficiary of the crypto treasury or in the active expansion of products such as ETF products and AI infrastructure, it shows that Galaxy aims to respond to market uncertainties through diversified and compliant layouts.