Galaxy Digital Announces Preliminary Fourth Quarter 2020 and 2021 Year-to-Date Update
Comprehensive Income increased over 650% in the Fourth Quarter 2020
Counterparty trading volumes increased over 80% in the Fourth Quarter 2020
Net Book Value Per Share increased over 75% in the Fourth Quarter 2020
Assets Under Management ("AUM") increased over 100% in the Fourth Quarter 2020
NEW YORK, Feb. 24, 2021 /CNW/ - Galaxy Digital Holdings Ltd. (TSX: GLXY) (the "Company" or "GDH Ltd.") today announced preliminary financial results for the quarter ended December 31, 2020 for both itself and Galaxy Digital Holdings LP (the "Partnership" or "GDH LP").
Given the material change in the operating environment of the cryptocurrency and digital sector since the Company reported Q3 2020 earnings, as well as the shifts in digital asset prices, the management team believes it is prudent to provide our stakeholders with an update on our performance for the quarter ended December 31, 2020 and 2021 year-to-date.
Select Financial Highlights for the fourth quarter of 2020, ended December 31, 2020
The Company expects to report Comprehensive Income for the quarter ended December 31, 2020 to exceed $325 million, representing a sequential quarter-over-quarter increase of over 650%.
The Company also expects that the Partnership's Net Book Value Per Share
as of December 31, 2020 increased in excess of 75% since September 30, 2020.
The primary drivers of these results include appreciation in the value of the Company's digital assets and other principal investments, as well as increased counterparty trading volumes and revenues.
Select Operational Highlights for the fourth quarter of 2020, ended December 31, 2020
Galaxy Digital Trading ("GDT") expects to report a sequential quarter-over-quarter counterparty trading volume increase of approximately over 80%.
Galaxy Digital Lending ("GDL") expects to report that the Company's counterparty loan book grew in excess of 300% to more than $110 million and that the Company grew gross counterparty loan originations in excess of 90% to $110 million in the period ended December 31, 2020.
There was no significant change in the Company's digital asset holdings during the fourth quarter of 2020, and the Company has, as a result, benefited from the increase in asset prices since September 30, 2020.
Galaxy Digital Asset Management ("GDAM") AUM(a) as of December 31, 2020 was approximately $815 million, representing an increase of over 100% since September 30, 2020.
GDAM saw an increase of over 200% in investor subscription transactions, representing an over 400% increase in dollar terms. In December 2020, GDAM launched the CI Galaxy Bitcoin Fund (Ticker: BTCG), a TSX-listed closed end mutual fund, in partnership with CI Financial. Additionally, the Bloomberg Galaxy Bitcoin Index (Ticker: BTC) went live, and GDAM entered into two new distribution partnerships.
The Company completed seven new investments in companies and held approximately 70 investments across 50 portfolio companies as of December 31, 2020.
Select Operational Highlights as of February 19, 2021
GDT counterparty trading volumes continued significant growth between January 1, 2021
and February 19, 2021and represented approximately 93% of counterparty trading volumes for the quarter ended December 31, 2020.
GDL continued to experience strong growth in the Company's counterparty loan book for the period from January 1, 2021 to February 19, 2021, increasing in excess of 230% to approximately $370 million and grew gross counterparty loan originations in excess of 234% to approximately $367 million since December 31, 2020.
There was no significant change in the Company's digital asset holdings since December 31, 2020, and the Company has, as a result, benefited from the increase in asset prices since the start of the year.
GDAM's AUM(a)currently stands at approximately $1,180 million as of February 19, 2021, representing an increase of approximately 45% since December 31, 2020.
Recent GDAM product launches include the Galaxy Ethereum Funds and the CI Galaxy Bitcoin ETF, for which Galaxy has been named sub-advisor and a preliminary prospectus has been filed in Canada. The Galaxy Ethereum Funds will track the newly launched Bloomberg Galaxy Ethereum Index (Ticker: ETH), the third in the Bloomberg-Galaxy family of indices.
In the period between January 1, 2021 and February 19, 2021, the Company completed eight new investments in companies and now holds approximately 78 investments across 55 portfolio companies, spanning blockchain-based payments, institutional custody, retail consumer services platforms, smart contract digitization services, cyber security and blockchain surveillance, mining and mining-related services, staking services, and various decentralized protocols covering network scaling, exchange, lending, and open-source code collaboration.
The Company cautions that the data in this press release is preliminary, unaudited and subject to change as management completes its year-end financial procedures and annual independent audit. Further, the Company may elect to provide different key operating and financial metrics in the future, given its evolving business mix. The Company plans to announce its fourth quarter and 2020 year-end results at the end of March 2021.
(a) AUM is an internal estimate inclusive of a sub-advised fund, committed capital in a closed-end vehicle, and seed investments by affiliates. Changes in AUM are generally the result of performance, contributions, and withdrawals.
Disclaimers and Additional Information
This press release contains certain pre-released fourth quarter 2020 and first quarter 2021 financial information (the "pre-released financial information"). The pre-released financial information contained in this press release are preliminary and represent the most current information available to the Company's management, as the Company completes its year-end financial procedures. The Company's actual consolidated financial statements for such period may result in material changes to the pre-released financial information summarized in this press release (including by any one financial metric, or all of the financial metrics, being below or above the figures indicated) as a result of the completion of normal quarter and year end accounting procedures and adjustments and annual independent audit, and also what one might expect to be in the final consolidated financial statements based on the financial information summarized in this press release. Although the Company believes the expectations reflected in this press release are based upon reasonable assumptions, the Company can give no assurance that actual results will not differ materially from these expectations.
The TSX has not approved or disapproved of the information contained herein. The Ontario Securities Commission has not passed upon the merits of the disclosure record of the Company.
The Company listed on the TSX via TSX Sandbox, an initiative intended to facilitate listing applications that may not satisfy the original listing requirements of TSX, but due to facts or situations unique to a particular issuer otherwise warrant a listing on TSX. The TSX has exercised its discretion to waive the requirements of subsection 309(c)(i) of its manual (C$10 million in treasury resulting from public raise) which the Company did not meet and has approved the listing of the Company pursuant to TSX Sandbox. The Company's approval pursuant to TSX Sandbox was conditioned upon public filing of an Annual Information Form and prominent quarterly disclosure of digital assets and investments, which the Company has completed and agreed to continue to provide. The Company will remain listed pursuant to TSX Sandbox until such time as it has completed a twelve-month period without significant compliance issues after graduation. In addition, the Company is required to disclose the following two risk factors that were also included in the most recent Annual Information Form for the year-ended 2019: (1) The Company has limited operating history and its business lines are nascent and subject to material legal, regulatory, operational and other risks in every jurisdiction; and (2) the market price and trading volume of the Company's ordinary shares has been volatile and will likely continue to be so in response to, among other factors, market fluctuations in digital assets generally or the digital assets that the Company holds or trades.
No offering is being made by this material. This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.
BLOOMBERG is a trademark or service mark of Bloomberg Finance L.P. GALAXY is a trademark of Galaxy Digital Capital Management LP (GDCM). Bloomberg Finance L.P. and its affiliates (collectively, Bloomberg) are not affiliated with GDCM, the Galaxy Funds and their respective affiliates (collectively, Galaxy). Bloomberg's association with Galaxy is to act as the administrator and calculation agent of the Indices (collectively, the "Index"), which is the property of Bloomberg. Neither Bloomberg nor Galaxy guarantee the timeliness, accurateness, or completeness of any data or information relating to the Index or results to be obtained. Neither Bloomberg nor Galaxy make any warranty, express or implied, as to the Index, any data or values relating thereto or any financial product or instrument linked to, using as a component thereof or based on the Index (Products) or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Bloomberg, its licensees, Galaxy, and their respective employees, contractors, agents, suppliers, and vendors shall have no liability or responsibility whatsoever for any injury or damages—whether direct, indirect, consequential, incidental, punitive, or otherwise—arising in connection with the Index, any data or values relating thereto or any Products—whether arising from their negligence or otherwise.
Certain information in this press release, including, but not limited to, statements regarding the Company or Partnership's anticipated fourth quarter 2020 and first quarter 2021 results, may constitute forward looking information (collectively, forward-looking statements), which can be identified by the use of terms such as "may," "will," "should," "expect," "anticipate," "project," "estimate," "intend," "continue" or "believe" (or the negatives) or other similar variations. Because of various risks and uncertainties, including those referenced below, actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Forward looking statements in the release are subject to the risk that the pre-released financial information is revised as a result of the completion of normal quarter and year end accounting procedures and adjustments, the global economy, industry or the Company's businesses and investments do not perform as anticipated, that revenue or expenses estimates may not be met or may be materially less or more than those anticipated and those other risks contained in the MD&A's and Annual Information Form (AIF) for the year ended December 31, 2019. Factors that could cause actual results of the Company and its businesses to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions. In connection with the forward-looking statements contained in this press release, the Company has made assumptions that no significant events occur outside of the Company's and Partnership's normal course of business. Forward-looking statements are not guarantees of future performance, accordingly, you should not put undue reliance on forward-looking statements. Information identifying assumptions, risks and uncertainties relating to the Company and the Partnership are contained in the Company's filings with the Canadian securities regulators available at www.sedar.com. The forward-looking statements in this press release are applicable only as of the date of this release or as of the date specified in the relevant forward-looking statement and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
About GDH Ltd. and GDH LP
The Company's only significant asset is a minority investment in GDH LP. GDH LP is a diversified, financial services and investment management company in the digital asset, cryptocurrency and blockchain technology sector. GDH LP's multi-disciplinary team has extensive experience spanning investing, portfolio management, capital markets, operations, and blockchain technology. The Partnership operates in the following businesses: Trading, Asset Management, Principal Investments, Investment Banking and Mining. The CEO of GDH Ltd. and the general partner of GDH LP is Michael Novogratz. GDH LP is headquartered in New York City, with offices in Tokyo, Japan, London, England, Hong Kong, Chicago, Illinois, Jersey City, U.S., San Francisco, U. S., and the Cayman Islands (registered office). Additional information about GDH LP's businesses and products is available on www.galaxydigital.io.
.Excluding non-controlling interests.
. Net book value excludes non-controlling interests.
. Excluding non-controlling interests.
. Excluding non-controlling interests.
All figures are in U.S. Dollars unless otherwise noted.
SOURCE Galaxy Digital Holdings Ltd.