Galaxy Digital, led by Mike Novogratz, has broadened its interest in acquiring assets from bankrupt crypto companies, extending its portfolio beyond bitcoin and ether sales on behalf of FTX’s estate management.
This move follows the Financial Times’ report revealing Galaxy Digital’s intention to capitalize on opportunities arising from distressed crypto firms.
Galaxy Digital Asset Acquisition and Growth
Sources reported a significant deal in August that saw Galaxy’s assets under management surge threefold to $5.3 billion after securing a sale of bitcoin and ether held by FTX’s crypto exchange. Subsequently, court approval enabled Galaxy to sell FTX’s shares in Grayscale and Bitwise investment funds, further expanding its asset portfolio.
Steve Kurz, Galaxy’s global head of asset management, expressed the firm’s intent to replicate this success with other bankrupt companies, particularly those FTX invested in as a venture capital provider. This strategy includes Galaxy’s recent acquisition at auction of the self-custody platform GK8 from the bankrupt Celsius Network, showcasing the company’s diversified investment approach.
Galaxy Digital Investment Track Record
Kurz highlighted Galaxy’s robust history of investing off its balance sheet in the crypto venture space for over five years, positioning the firm as a favorable candidate for similar ventures. Further, this track record reinforces Galaxy’s confidence in successfully navigating the acquisition of distressed assets in the crypto market.
Despite experiencing an approximately 80% decrease in its Toronto-traded shares the previous year, Galaxy Digital remains proactive. The firm also applied for a spot bitcoin exchange-traded fund (ETF) partnership with Invesco. Additionally, it announced a collaboration with asset manager DWS in April to develop exchange-traded products (ETPs) targeting the European market.
Galaxy Digital’s strategic moves to diversify its asset base through acquisitions from distressed crypto companies aligns with its growth-oriented approach in the evolving cryptocurrency landscape with a proven track record and ongoing initiatives to expand its investment offerings globally. Lastly, the firm also remains poised for further advancements in the digital asset space.