Why Galaxy Stock Jumped 12% on Friday

Galaxy Digital (TSX:GLXY) stock saw shares rebound even further on Friday, as the company saw a recovery in Bitcoin that affected its share price.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Published March 18, 2022 2:00 pm EDT

Galaxy Digital Holdings (TSX: GLXY) saw shares recover 12% on Friday. The company had a strong week that ended with the cryptocurrency company announcing an earnings date of Mar. 31, 2022.

What happened?

It looks like cryptocurrency companies such as Galaxy Digital stock are back in the black, with Galaxy leading the charge. The growth in Bitcoin has been exceptionally strong for the cryptocurrency asset manager. It now also has the incredible support of the United States government.

After President Joe Biden’s executive order last week, another announcement came from Executive Chairman Jerome Powell. Powell argued that despite cryptocurrency once being a risky asset, that may not be the case in the future. So, while riskier assets may indeed fluctuate with higher interest rates, Galaxy Digital stock and other crypto assets may not be likely to do so.

So what?

This support of the U.S. government cannot be understated. While other industries such as cannabis remain elusive for long-term investors, cryptocurrency has taken a lead role. And therefore, those companies, such as Galaxy Digital stock, that support Bitcoin trading will also see growth in the near and long term.

Galaxy Digital stock also has a lot of ways to bring in cash through cryptocurrency growth. That includes mining, trading, asset management, lending, and more. While many of its assets rely on the price of Bitcoin, this led to the reduction in share price and earnings of last quarter. Now, with another quarter on the way, and growth from Bitcoin once more, it looks like investors are bullish about the stock.

Now what?

While there may be more fluctuation in the future, with the price of Bitcoin likely to remain between US$30,000 and US$50,000 for a while, Galaxy Digital stock will still see growth in the next quarter. That growth could lead to another bull run for this company and its holdings.

Furthermore, the company remains strong, with a solid balance sheet and business plan that can see both organic and inorganic growth for investors. In fact, it’s so strong that it currently has a consensus target price of about $41. That’s a potential upside of 128% as of writing.

Shares of Galaxy Digital stock were up 11% on Friday and 29% in the last month. It currently trades at 4.08 times earnings.