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Galaxy Digital's Treasury Bled While Its Operating Businesses Turned a Corner
14 Aug 2026, 13:48
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Galaxy Digital posted an $85 million net loss driven by its own crypto holdings, but the figure masks real progress at its trading and data center businesses, including the first delivered halls at its Helios AI campus.
Galaxy Digital reported an $85 million net loss for the second quarter, driven almost entirely by falling crypto prices marking down its own treasury holdings, a headline number that obscures a meaningfully better quarter for the rest of the business. The company's two core operating segments, trading and asset management, generated a combined $86 million in adjusted gross profit, up $34 million from the first quarter, while its Helios data center campus in West Texas delivered its final data halls to tenant CoreWeave before the quarter closed.
The loss sat almost entirely in Galaxy's treasury and corporate segment, which holds the company's own crypto and investment positions and posted a $42 million adjusted gross loss as net digital asset exposure fell 15% from the prior quarter to $1.2 billion. The operating businesses moved in the opposite direction: digital assets adjusted gross profit rose 34% to $66 million even as industry-wide trading volumes fell by double digits, with Galaxy's own volumes down only about 7%, suggesting the firm gained market share in a shrinking market. Founder and CEO Mike Novogratz told analysts that "crypto bear markets are the best time to build," framing the quarter's split results as evidence of a broader strategic rotation that has been underway for roughly a year, with about 72% of the company's $2.7 billion in equity now allocated to operating businesses rather than treasury holdings.
The data center segment produced its first real operating results, posting $20 million in adjusted gross profit compared with just $3 million previously, though a portion of that figure benefited from a one-time tax credit tied to clean-electricity investment. Galaxy has already funded the next phase of expansion, closing a $3.5 billion offering of senior secured notes in late July, the largest financing in the company's history, covering the remainder of a 260-megawatt buildout with deliveries expected starting in 2027. Three additional Texas sites acquired since quarter-end push the company's total development pipeline past 5.7 gigawatts.
Novogratz used an accompanying shareholder letter to argue that onchain finance and AI's growing demand for computing power represent two sides of the same long-term thesis, backing the case with a roster of institutional partnerships rather than projections alone. BNY is adding crypto staking to its custody platform with Galaxy, State Street runs a tokenized cash-management fund together with the company, and Invesco's crypto ETFs carry the Invesco Galaxy name. The company's Helios lease alone is projected to generate more than $1 billion a year in revenue across its full 15-year term, though none of that shows up in the current quarter's results, a gap Novogratz argues future quarters will close as the newly built infrastructure comes fully online.
The loss sat almost entirely in Galaxy's treasury and corporate segment, which holds the company's own crypto and investment positions and posted a $42 million adjusted gross loss as net digital asset exposure fell 15% from the prior quarter to $1.2 billion. The operating businesses moved in the opposite direction: digital assets adjusted gross profit rose 34% to $66 million even as industry-wide trading volumes fell by double digits, with Galaxy's own volumes down only about 7%, suggesting the firm gained market share in a shrinking market. Founder and CEO Mike Novogratz told analysts that "crypto bear markets are the best time to build," framing the quarter's split results as evidence of a broader strategic rotation that has been underway for roughly a year, with about 72% of the company's $2.7 billion in equity now allocated to operating businesses rather than treasury holdings.
The data center segment produced its first real operating results, posting $20 million in adjusted gross profit compared with just $3 million previously, though a portion of that figure benefited from a one-time tax credit tied to clean-electricity investment. Galaxy has already funded the next phase of expansion, closing a $3.5 billion offering of senior secured notes in late July, the largest financing in the company's history, covering the remainder of a 260-megawatt buildout with deliveries expected starting in 2027. Three additional Texas sites acquired since quarter-end push the company's total development pipeline past 5.7 gigawatts.
Novogratz used an accompanying shareholder letter to argue that onchain finance and AI's growing demand for computing power represent two sides of the same long-term thesis, backing the case with a roster of institutional partnerships rather than projections alone. BNY is adding crypto staking to its custody platform with Galaxy, State Street runs a tokenized cash-management fund together with the company, and Invesco's crypto ETFs carry the Invesco Galaxy name. The company's Helios lease alone is projected to generate more than $1 billion a year in revenue across its full 15-year term, though none of that shows up in the current quarter's results, a gap Novogratz argues future quarters will close as the newly built infrastructure comes fully online.