Galaxy Digital's Ongoing Crypto Asset Acquisition Strategy: Expanding Portfolio Beyond FTX's Coin Sale Deal
Galaxy Digital, under the leadership of Mike Novogratz, has embarked on an active pursuit of asset acquisition opportunities within the cryptocurrency sector, particularly focusing on financially distressed companies. This strategic move comes on the heels of a notable success—Galaxy's deal to sell bitcoin and ether from FTX, as reported by the Financial Times, resulting in a substantial surge in Galaxy's assets under management, reaching $5.3 billion.
The pivotal August transaction involved the liquidation of FTX's bitcoin and ether assets on behalf of the estate's management. This transaction led to a remarkable threefold expansion of Galaxy's assets. Following this success, Galaxy secured court approval to further liquidate FTX's shares in Grayscale and Bitwise investment funds.
Steve Kurz, Galaxy's global head of asset management, articulated the firm's intention to replicate this success by actively pursuing opportunities with other financially distressed companies. This includes those in which FTX had invested as a venture capital provider. Noteworthy is Galaxy's previous acquisition of the self-custody platform GK8 from the bankrupt crypto lender Celsius Network, a strategic move executed in a December auction.
Kurz underscored Galaxy's robust track record in crypto venture investments spanning the past five years, positioning the firm as a compelling candidate for such acquisitions. Despite facing an 80% decline in its Toronto-traded shares over the past year, Galaxy Digital remains resolute and proactive in its strategic initiatives.
Going beyond asset acquisitions, Galaxy Digital has taken steps to diversify its offerings. The firm, in collaboration with Invesco, has applied for a spot bitcoin exchange-traded fund (ETF). Additionally, in April, Galaxy announced a partnership with asset manager DWS to develop exchange-traded products (ETPs) tailored for the European market. These initiatives underscore Galaxy's commitment to adapting and thriving in the dynamic landscape of the cryptocurrency industry.