CEO of Galaxy Asset Management anticipates Bitcoin correction as the company achieves $10 billion milestone
Galaxy Asset Management has achieved a significant milestone by surpassing $10 billion in Assets under Management (AUM) for the first time on February 29, 2024. The institutional investing division of Galaxy Digital Holdings credited this achievement to the growing enthusiasm among institutional investors for digital assets. Mike Novogratz, CEO of Galaxy Digital, announced this accomplishment on March 19 on X, describing it as an ongoing effort to expand investor access to the digital economy.
Over the past year, Galaxy Asset Management has experienced a substantial increase in its AUM, more than tripling its value. The firm attributes this growth to various investment strategies, including passive, active, and venture investment strategies. One notable strategy was the Invesco Galaxy Bitcoin ETF (BTCO).
Interestingly, BTCO has seen relatively modest inflows of $175 million to date, ranking behind only the Franklin Bitcoin ETF (EZBC) and the WisdomTree Bitcoin Fund (BTCW), both of which were introduced in mid-January and have recorded even lower inflows.
On March 18, the company reported a preliminary AUM of $10.1 billion, a 24.8% increase from February. While net outflows from a specific “opportunistic mandate” hindered further growth, the overall market growth was the primary driver behind this surge.
Despite the recent milestone, Galaxy Digital’s stock (GLXY) experienced a 4% decline to close at $12.80 in after-hours trading. However, over a longer period, the stock price has risen by 23.5% since the beginning of the year, buoyed by the approval of spot Bitcoin ETFs in mid-January. Nevertheless, it is still significantly below its all-time high of $40 in November 2021.
In addition to its success in asset management, Galaxy Digital is currently awaiting regulatory clearance to launch a spot Ethereum ETF, with a decision expected by July 5. The firm, founded in 2018, includes Galaxy Digital Holdings’ Global Markets and Digital Infrastructure Solutions divisions and is led by Steve Kurz, the Global Head of GAM.
The milestone achieved by Galaxy Digital coincided with massive inflows into Bitcoin ETFs. In an interview with Forbes, Novogratz predicted that this development would contribute to the next wave of Bitcoin adoption. However, he also forecasted a potential correction in Bitcoin’s price, with a possible decline to as low as $50,000. This projection seems to be accurate as the value of Bitcoin has dropped from its peak of $73,580 on March 14 to $63,877 at the current evaluation.
In a more recent interview with CNBC, Novogratz explained that ongoing net inflows into the nine U.S. spot Bitcoin ETFs are likely to drive BTC’s price higher. Conversely, a shift to net outflows from these ETFs could signal the beginning of a significant market correction. Novogratz emphasized that this trend is now a crucial factor for traders monitoring the inflows and outflows of spot Bitcoin ETFs.
