Why Galaxy Digital Stock Fell 10% on Monday

Galaxy Digital (TSX:GLXY) stock traded down on Monday in reaction to the price of cryptocurrencies falling slightly over the weekend.

Amy Legate-Wolfe

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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 21, 2022 3:00 pm EDT

Galaxy Digital Holdings (TSX:GLXY) saw shares go through a slight price correction, as investors reacted to the drop in cryptocurrencies over the weekend.

What happened?

Bitcoin, along with other cryptocurrencies, such as Ether and Solana, lost some of the gains they made last week, losing about $2,000 in value from heights on Saturday. Galaxy Digital stock saw shares drop by 10% in the news before recovering slightly.

This comes just as Galaxy Digital stock saw shares jump 12% on Friday, as Bitcoin and other digital currency companies remained higher and steadier than they have in months. Even still, cryptocurrencies in general remain far off from all-time highs by the tens of thousands in the case of Bitcoin and thousands in the case of Ether.

So what?

The fall comes as cryptocurrencies continue to react to financial markets. Despite the business aiming to be a standalone means of making money, it seems that investment has become correlated with equities. The recent drop comes over fear of the continuing war between Russia and Ukraine.

In the case of Galaxy Digital stock, it seems it’s been more of a correction and wait and see approach. There was a surge, but there isn’t a fall quite yet. This goes to show that while investors may be cautious due to the risky environment, they don’t exactly think they should get out of it entirely.

Now what?

Whether it’s government institutions, finance companies, big banks, Wall Street, or whatever, everyone seems to agree. Cryptocurrency is the future. In that future, Galaxy Digital stock will have a strong place as a miner, lender, asset manager, and more in the world of crypto.

That being said, for the next year or so, it’s likely that Galaxy Digital stock will also continue to be a risky investment. It continues to be quite volatile, as the volatile market influences its movement. But, long term, analysts remain quite optimistic, giving it a potential upside of 128% as of writing.

Shares of Galaxy Digital stock were down 7% on Monday as of writing and down 10% in the last year. It now trades at 4.21 times earnings.