Galaxy Digital shares fell 13% on Wednesday after the firm reported an $85 million quarterly loss, a miss that underscores the persistent volatility of crypto markets. The investment management company, led by Mike Novogratz, is now betting on artificial intelligence to stabilize future earnings.
The $85 million miss
Galaxy Digital posted the loss for the quarter ended June 30, 2026, missing revenue expectations. The firm did not provide a breakdown of the loss, but the result reflects the sharp swings in digital asset prices that have defined the year. Bitcoin and ether both saw double-digit percentage declines during the period, dragging down trading volumes and investment gains.
Why the market reacted
The 13% share drop is the steepest single-day decline for Galaxy Digital this year. Investors had been hoping for a rebound after a strong first quarter, but the second-quarter numbers dashed those hopes. The loss also comes as the broader crypto sector faces regulatory uncertainty and a slowdown in institutional adoption.
Pivoting to AI
Galaxy Digital has been quietly building out an AI-focused unit, investing in infrastructure and talent to serve the growing demand for computing power. The company sees AI as a way to diversify revenue beyond trading and asset management, which are heavily tied to crypto prices. If the pivot succeeds, it could provide a more stable earnings base.
The firm is expected to provide more details on its AI strategy during its next earnings call. For now, the market is watching to see whether the new business line can deliver results quickly enough to offset the crypto volatility that drove this quarter's loss.
