Even though
the prolonged period of cryptocurrency winter is behind us, digital asset
market companies still feel its adverse effects. The consolidation of Bitcoin
(BTC) and other asset prices, low network activity, and increasing mining
difficulty make it challenging for both miners and cryptocurrency funds to
achieve profitability. The latest examples are publicly listed companies Riot
Platforms Inc. (NASDAQ: RIOT) and Galaxy Digital Holdings Ltd. (TSX: GLXY),
which reported negative financial results in the second quarter.
Galaxy Digital loses $46
million in Q2 2023
Founded by
American investor Michael Novogratz, the cryptocurrency firm Galaxy Digital
lost $46 million in the past quarter. This is a significant negative change
compared to the profit of $134.3 million reported in the previous quarter.
“Compared
to the first quarter, the decrease was primarily attributable to lower net
realized gains on digital assets and net unrealized losses on investments,
partially offset by higher net realized gains on investments,” the company
explained in the official statement.
Trading
profits decreased by 54% quarter-over-quarter (QoQ) to $565 million. However,
the company began seeking profits elsewhere, including in the asset management
industry. Galaxy Asset Management achieved revenue of $33.8 million,
representing an increase of 619% QoQ. Mining profits, operated by Galaxy
Digital Infrastructure Solutions, grew by 51% QoQ to $15.4 million.
“Galaxy’s
operating businesses performed well in the second quarter against a backdrop of
continued uncertainty and regulatory pressure, as we continue to manage the
Company to meet the evolving needs of our clients,” Michael Novogratz, the
Founder and CEO of Galaxy, said.
The company
also reported maintaining a “strong liquidity position” of $696 million,
consisting of $302 million in cash and $395 million in digital assets. Of the
latter, stablecoins constituted $167 million.
Riot Blockchain Lost $27.7
Million in the Same Quarter
Turning to
the publicly listed cryptocurrency miner, Riot Blockchain, the company reported
Q2 2023 revenue of $76.7 million and achieved a record hash rate capacity of
10.7 EH/s. However, it was not enough to achieve profitability, with a net loss
of $27.7 million for the three-month period. Compared to the loss a…
