I’m fascinated by Galaxy Digital Holdings and by extension Galaxy Digital Europe because it is firm within the cryptocurrency sector.
Not only is it in the cryptocurrency sector, it is a publicly traded firm.
That’s a bold move in and of itself, especially in a sector that many suspect to be rife with scam artists and frauds. If the company can pull it off and show that it can help to bring trust in a sector that seeks to be trustless, it can see a tremendous upside.
That means that you can own a small piece of a firm that wants to lead the way in cryptocurrency intermediary services. The financial firm holds assets, invests in companies within the sector, rolls out Galaxy Bitcoin Funds, and has a Galaxy Crypto Index Fund.
It seeks to carve a niche in the institutional and accredited realm.
The company puts out research like “Bitcoin’s Role in the Modern Portfolio” and works with a wide variety of organizations to capitalize on and further the growth of bitcoin and other digital assets.
That’s why I’m interested in how Galaxy Digital Europe is growing in the continent. I’m especially interested because the blockchain and cryptocurrency sector is undergoing substantial changes. First, digital asset prices have gone down since 2017. As prices declined, interest in the sector followed.
Many companies and crypto projects either laid people off or they went out of business. Prices still haven’t recovered but firms still have further brands like Galaxy Digital Europe to establish a presence and become more relevant in the sector.
Galaxy Digital Europe and Margin
Institutions want safety and yield. The firm, according to Stephen Kelso, thinks that it has the right competitive advantages to provide productive assets that could make a positive dent in the institutional portfolio.
He notes in an interview that Galaxy Digital Europe can work with institutional investors that use a multi-asset strategy. These represent more warm leads because they may have already started to dabble in the sector and acquire digital assets off balance sheet. It makes it even more of a potential play for the firm as digital assets become more stable and accure more respect.
Growth Potential for Galaxy Digital Europe
The next aspect of growth in the cryptocurrency sector, according to Kelso, is that of derivatives. This is coming to play with firms such as Bakkt, a company that Galaxy Digital Holdings backs. He makes a good point in that with players like CME, and other respected institutions rolling out cryptocurrency derivatives, it builds credibility but also “makes it really difficult for others not to get involved.”
That’s a compelling statement because Galaxy Digital is relying on the institutional herd and so are retail cryptocurrency investors to help grow the sector and increase gains. But there’s significant potential here. The digitization of assets brings about the opportunity for fractional ownership of bonds, real estate, and other markets that might be less liquid at present. This digitization or tokenization of assets is what more are looking forward to as they seek to allocate money to this sector.
The next narrative is that bitcoin will appeal to the macro world, it can bolster portfolios with liquidity, volatility, leverage, and overall risk management.
Bitcoin is seeing substantial use in use as collateral with the rise of firms such as BlockFi and Celsisus, among other firms in the crypto asset based lending sector. Hedging traditional portfolios with an asset like bitcoin that is highly liquid and can certainly appreciate in value can be a compelling addition to the portfolio.
Galaxy Digital continues to stick the bitcoin is digital gold money and we’re seeing how institutions are slowly flocking to this thesis.