Galaxy Digital’s Q3 earnings mirror crypto euphoria

Galaxy Digital’s over-the-counter trading desk posted record volumes in the third quarter, signaling once again that institutional uptake of digital assets is on the rise.

The company’s third-quarter earnings report showed a 75% year-over-year rise in trading volumes, reaching approximately $1.4 billion. The increase was attributed to an expanding counterparty base, rollout of an electronic trading platform and continued growth of Galaxy Digital’s crypto derivatives business.

Assets under management totaled $407.4 million at the end of the third quarter, which include $82.4 million in passive Bitcoin (BTC) and index funds and $325 million in the Galaxy EOS VC Fund. The latter is a partnership with blockchain merchant bank Block.one, founder of EOS.

Galaxy’s Bitcoin funds rose 17.3% in the third quarter. Its large-cap Crypto Index Fund returned 32.3%. Still, the company wasn’t able to turn a profit; its net loss amounted to $44.6 million for the three months ended Sept. 30, 2020.

Galaxy Digital was founded in 2018 by billionaire Mike Novogratz in an effort to bring more institutional investors to digital assets. Novogratz says in today’s official press release that Galaxy Digital is preparing itself for “the clear, incoming wave of institutional adoption ahead of digital assets and blockchain solutions by investors, corporates and governments.”

While the 2017 bull market was largely driven by retail FOMO, the euphoria surrounding Bitcoin in 2020 is largely tied to institutional uptake.

There’s evidence that institutional investors are flocking to Bitcoin in greater numbers in the fourth quarter. Grayscale’s Bitcoin Trust saw record inflows at the start of November, putting it on track to reach 500,000 BTC by the end of 2020. That would amount to roughly 2.7% of Bitcoin’s circulating supply.

Institutional investors like Paul Tudor Jones and Stanley Druckenmiller also own Bitcoin. Both have touted the cryptocurrency’s growth potential in the…

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