Is Galaxy Digital Stock Worth a Buy After Its Third-Quarter Earnings?

After slower growth for the whole cryptocurrency industry in the third quarter, is Galaxy Digital stock still worth buying today?

| More on:
Handwriting text writing Are You Ready For Tomorrow question. Concept meaning Preparation to the future Motivation Stand blackboard with white words behind blurry blue paper lobs woody floor.

Image source: Getty Images

This morning before the market opened, Galaxy Digital (TSX:GLXY), one of the top stocks you can buy for exposure to cryptocurrencies, reported its third-quarter earnings for 2021.

Although cryptocurrencies have been hot lately and gained a tonne of momentum over the last few weeks, much of this growth came just after the third quarter ended. So while it’s crucial to get an idea of how Galaxy performed through the summer, we already know that its business has likely seen another major gain over the last few weeks.

What does Galaxy Digital stock do?

Most companies that operate in the cryptocurrency industry are considered tech stocks. Galaxy, though, is considered a financial services stock that serves the cryptocurrency industry. This is crucial because instead of trying to create a product or service and competing with other tech stocks, Galaxy is building a business that can serve the entire industry.

The company operates through five main segments. Galaxy Digital stock also has an investment banking segment, where it advises on mergers and acquisitions in the space. In fact, during its earnings report, Galaxy said that it’s currently advising on two mergers and acquisitions that have yet to be announced publicly.

Another division is its trading segment, where it mainly serves institutions and high-net-worth individuals. It also has its own propriety mining business and a segment for venture capital investments.

Galaxy Digital’s earnings

The company reported its net comprehensive income increased by more than 1,000% year over year to $517 million. Its assets under management now stand at $3.2 billion and continue to grow as the popularity in the industry expands rapidly.

In addition, Galaxy Digital stock also deployed another $62 million in NFT-related companies during the quarter. And on top of that, it also bought two highly-prominent NFTs.

Galaxy also was the main partner in launching two passively managed ETFs for investors looking to gain exposure to digital assets and blockchain technology.

Also, its principal investments division, which I think offers investors the most exciting potential for growth, now has 110 total investments in 71 different companies.

Galaxy also announced that as of September 30, 2021, the partnership had a material net holding in Bitcoin of approximately $555.2 million and Ether of approximately $261.4 million, excluding non-controlling interests.

Its mining segment also saw strong results. During the third quarter, Galaxy was mining Bitcoin at a cost that was more than 80% below its fair market value.

Should you buy the crypto stock today?

So far this year, Galaxy Digital stock has already gained an incredible 292%. However, despite this massive growth, there is still a tonne of potential for the company to expand its operations. Furthermore, the cryptocurrency revolution is still only just getting started.

There is clearly a tonne of potential with blockchain technology and cryptocurrencies, which is why we continue to see institutions adapt and look for ways to join the space. And with Galaxy, the company is building a multi-segmented business that serves all areas of the growing industry.

The business looks to be progressing well and firing on all cylinders, which is why it might just be one of the best crypto stocks you buy.

Just remember, though, that this industry can be quite volatile. Furthermore, there can be periods of slower growth, as we saw through the third quarter this year. So if you’re looking to gain exposure to Galaxy Digital stock, it’s crucial to make a long-term commitment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa owns shares of Galaxy Digital Holdings Ltd. The Motley Fool has no position in any of the stocks mentioned.

More on Cryptocurrency

cryptocurrency, crypto, blockcahin

HIVE Blockchain Stock Fell 18% In October – Is It Time To Buy? 

Hive Blockchain (TSXV:HIVE) stock is down with the crypto market but ready for a BTC rebound.

Read more »

crypto, chart, stocks

2 Top Cryptocurrencies to Buy in October 2022

Ethereum and Solana are two of the most popular cryptocurrencies in the world that are well poised to deliver substantial…

Read more »

Hand arranging wood block stacking as step stair with arrow up.

2 Cryptocurrencies to Buy for Potential Recovery

The largest and most liquid cryptocurrencies may not always be the first to recover, and you may have to go…

Read more »

Senior couple at the lake having a picnic
Tech Stocks

3 TSX Stocks That Are Great Long-Term Picks

October is a ripe time to buy growth stocks for wealth creation. Use the market downturn to tap the recovery…

Read more »

cryptocurrency, crypto, blockchain
Tech Stocks

Sinking Crypto Stock: Is Hut 8 (TSX:HUT) Worth Buying at $2.30?

A prominent crypto stock trading at an absurdly cheap price, but you must have a high-risk appetite to consider buying…

Read more »

sad concerned deep in thought

Is Coinbase Stock a Good Bet for Cryptocurrency Investors?

Coinbase stock is down 80% from all-time highs, but the U.S.-based cryptocurrency exchange is still one of the largest platforms…

Read more »

Big Bitcoin logo.

Will Bitcoin Ever Shift to a Proof-of-Stake Model?

Following Ethereum's (CRYPTO:ETH) Merge, will Bitcoin (CRYPTO:BTC) adopt a proof-of-stake consensus mechanism or stand pat?

Read more »

cryptocurrency, crypto, blockchain

HIVE Blockchain (TSXV:HIVE) Stock: Is it Cheap or a Falling Knife?

HIVE Blockchain Technologies Ltd. (TSXV:HIVE)(NASDAQ:HIVE) is a crypto miner that looks undervalued in the face of major volatility.

Read more »