Galaxy Digital plunges after crushing earnings miss
Crypto-focused financial services firm reports $482M net loss as Bitcoin warning weighs on sentiment
Galaxy Digital Holdings reported a devastating fourth-quarter earnings miss, with the crypto-focused financial services firm posting a $482 million net loss as digital asset prices cratered and the broader cryptocurrency market entered a deep downturn.
The Nasdaq-listed company recorded a diluted loss per share of $(1.08) for the quarter ended December 31, missing analyst estimates of $0.21 by a staggering 609%, according to the earnings announcement. Revenue fell to $10.37 billion, well short of the $23.26 billion consensus forecast, representing a 55% shortfall.
The results reflect the brutal conditions across the cryptocurrency sector in late 2025. The total crypto market capitalization declined approximately 24% during the fourth quarter, with Bitcoin and other major digital assets experiencing significant price depreciation that directly impacted Galaxy's balance sheet.
Galaxy's core Digital Assets segment generated $51 million in adjusted gross profit, but trading volumes collapsed approximately 40% compared to the previous quarter, when the firm had executed a record $9 billion notional Bitcoin sale. The company cited a "softer macro environment and lower industry trading volumes and onchain activity" as key headwinds.
In a notably bearish assessment of market conditions, Alex Thorn, Galaxy's Head of Research, warned that Bitcoin could drift lower toward $70,000 and potentially down to the 200-week moving average around $60,000 over the coming weeks or months. The warning came as spot Bitcoin ETFs experienced their second-worst monthly outflow week on record, with combined withdrawals of $2.8 billion.
Galaxy noted that sustained ETF outflows below the $84,000 average cost basis for U.S. spot Bitcoin ETFs would continue to pressure prices, with the recent $2.8 billion weekly outflow representing a "major headwind" for the market. Thorn highlighted that the $58,000-$60,000 zone represents a critical test area, aligning with Bitcoin's realized price and the 200-week moving average.
The grim outlook for digital assets has prompted Wall Street analysts to trim their expectations. Cantor Fitzgerald maintained an Overweight rating but lowered its price target from $53 to $48, citing anticipated non-cash losses from declining digital asset prices. ATB Capital Markets reduced its one-year price target to $70 from $75, reflecting lower expected 2026 digital asset gross profits.
Despite the challenging conditions, Galaxy's loan book showed resilience, with average loan book size increasing marginally to $1.8 billion, indicating sustained client demand for credit services even as digital asset prices declined. However, assets under management and assets under stake both fell quarter-over-quarter, driven primarily by asset price depreciation rather than client outflows.
The company declined to provide forward guidance, citing the volatile nature of digital asset markets and unpredictable macroeconomic conditions. Galaxy shares were down 6.4% in premarket trading at $26.44, extending losses that have seen the stock trade in a 52-week range of $8.20 to $45.92.
Bitcoin is currently trading around $78,500, down approximately 39% from its October 2025 peak of $126,000, according to market data. The cryptocurrency's recent plunge below key technical levels triggered over $2 billion in derivatives liquidations, exacerbating selling pressure across the ecosystem.
With 46% of Bitcoin supply now "underwater"—meaning coins previously moved on-chain at higher prices are now in a loss position—Galaxy's research team warned of a "massive overhang of potential selling pressure" that could continue to weigh on prices in the near term.