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Galaxy Digital’s over-the-counter trading desk posted record volumes in the third quarter, signaling once again that institutional take-up of digital assets is on the rise.
The company’s third quarter earnings report showed a 75% year-over-year increase in trading volumes to approximately $ 1.4 billion. The increase was attributed to the expansion of the counterparty base, the launch of an electronic trading platform and the continued growth of Galaxy Digital’s crypto derivatives business.
Assets under management totaled $ 407.4 million at the end of the third quarter, which includes $ 82.4 million in passive bitcoin (BTC) and index funds and $ 325 million in the Galaxy EOS VC Fund. The latter is a partnership with the blockchain investment bank Block.one, founder of EOS.
Galaxy’s Bitcoin funds were up 17.3% in the third quarter. Its large-cap Crypto Index Fund returned 32.3%. However, the company was unable to make a profit; its net loss was $ 44.6 million for the three months ending September 30, 2020.
Galaxy Digital was founded in 2018 by billionaire Mike Novogratz in an effort to bring more institutional investors to digital assets. Novogratz says in today’s official press release that Galaxy Digital is preparing for “the clear wave of institutional adoption ahead of digital assets and blockchain solutions by investors, businesses and governments.”
While 2017’s bull market was largely driven by FOMO retail, the euphoria surrounding Bitcoin in 2020 is largely tied to institutional spread.
There is evidence that institutional investors are flocking to Bitcoin in greater numbers in the fourth quarter. Grayscale’s Bitcoin Trust posted record inflows in early November, putting it on track to hit 500,000 BTC by the end of 2020. That would equate to roughly 2.7% of Bitcoin’s circulating supply.
Institutional investors like Paul Tudor Jones and Stanley Druckenmiller also own Bitcoin. Both have publicized the growth potential of the cryptocurrency in the current macro environment.
Bitcoin’s price peaked near $ 16,500 in the past 24 hours, according to data from TradingView. As of this writing, it is still trading well north of $ 16,000.
