Galaxy Digital Stock Drops as Crypto Revenue Misses Estimates

Key Insights

• Galaxy Digital stock dropped after publishing its financial results.
• Its revenue dropped and came short of expectations amid the crypto winter.
• The company is now intensifying its pivot to the data center industry.

Galaxy Digital stock resumed its recent downward trend and moved below the important support level of $20 after the company published weak financial results amid the ongoing crypto winter. GLXY fell to $19.73, down by 45% from its highest point in June this year. This retreat may continue in the coming weeks as technicals point to more downside.

GLXY stock pared back the gains it made in the past few days after the company released weak financial results. These results came up short of what analysts were expecting as the crypto winter gained momentum.

Galaxy Digital’s revenue dropped to $8.7 billion in the second quarter, down by 15% from the $10.2 billion it made in the first quarter. The revenue was much lower than the $12 billion analysts expected.

Galaxy’s net loss continued to widen, even as the company made efforts to reduce costs. Its net loss came in at over $85 million.

The digital assets segment made an adjusted EBITDA of $11 million, while its treasury and corporate metric jumped to $78 million. On the positive side, the company’s data center segment made over $11 million in adjusted EBITDA.

These numbers came at a time when Galaxy Digital and other companies in the crypto industry are pivoting to other industries. Specifically, the company and Bitcoin mining firms are moving to the data center industry as the artificial intelligence boom gains steam.

Galaxy is spending substantial sums of money in the data space, through its partnership with CoreWeave, a company that Nvidia backs. It recently bought three new sites in Texas for the development of these AI data centers. By buying these sites, the company now aims to have a capacity of 5.7 GW.

It recently started to deliver its computing power to CoreWeave as part of the 15-year lease agreement. In its last quarter, the data center’s adjusted EBITDA jumped to $20 million. The company aims for the recent data revenue to jump to $80 million a quarter and an EBITDA margin of 90%.

This business will likely fuel its revenue growth in the future. Indeed, Yahoo Finance data shows that analysts expect that its revenue will be $56 billion this year, followed by $72 billion next year.

The challenge, however, is that building the infrastructure will consume substantial sums of money. This trend means that it may need to raise capital through a combination of debt and equity.

On the positive side, there are signs that the crypto winter is ending. Bitcoin has bottomed at $57,000 and has moved above $64,000. Other tokens like Ethereum and Cardano have done well in the past few months. This is important as Galaxy is one of the biggest holders of Bitcoin and other coins. It holds 6,894 coins worth over $441 million, $58 million worth of Solana, and $76 million worth of other tokens.

The daily chart showed GLXY falling from its June high near $36.10 toward $19.40. The stock also moved below the 61.8% Fibonacci retracement level.

That retracement can act as support during a correction. However, a decisive move below it weakens the prospect of an immediate rebound.

GLXY also approached the Strong Pivot Reversal level on the Murrey Math Lines indicator.

A continued breakdown could expose lower support near $17.50. The wider bearish target would sit near the Ultimate Support level around $12.50.

That level stood about 34% below the stock price used in the analysis.

However, the $12.50 target remains conditional. Murrey Math levels do not guarantee that a stock will continue declining.

A recovery above $20 would reduce immediate selling pressure.

Galaxy stock would need to reclaim the Major Support and Resistance pivot near $25 to invalidate the broader bearish structure.

The company’s weak crypto results could continue weighing on GLXY. Its CoreWeave lease and Helios expansion provide a separate growth path, but the data-center strategy requires substantial funding and time before reaching its projected scale.

This article is for informational purposes only and does not constitute financial or investment advice. Equity and cryptocurrency prices remain highly volatile.

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