Galaxy Digital had a rough start to the year as crypto prices dropped and the overall market shrank. In its first-quarter results, the company reported a net loss of $216 million, while the total crypto market cap fell by about 20% during the same period. Despite this tough environment, Galaxy CEO Mike Novogratz told Bloomberg that Hyperliquid (HYPE) helped the company avoid even bigger losses.
Galaxy Digital Q1 Snapshot
In its Q1 2026 report, Galaxy Digital said the net loss was mainly due to falling digital asset prices over the quarter. The company also posted an adjusted gross loss of $88 million and an adjusted EBITDA loss of $188 million. On a per-share basis, Galaxy reported diluted and adjusted earnings per share of $0.49.
Even with these losses, Galaxy Digital ended the quarter with a solid balance sheet. It had total equity of $2.8 billion and cash plus stablecoin holdings of $2.6 billion as of March 31, 2026. The company said it finished Q1 with about $5 billion in assets under management and $3.2 billion in assets under stake.
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At the same time, the firm reported that its asset management segment brought in $69 million in net inflows over the quarter. This suggests demand was still there, even though pricing pressure hurt performance. Novogratz focused on how Galaxy Digital managed risk and exposure while markets moved against crypto. He said the balance sheet “lost money because crypto prices were down,” but argued that Galaxy “way outperformed” what would have happened if it hadn’t adjusted its positions.
Hyperliquid As The ‘Future Of Crypto’?
According to Novogratz, the company cut some positions and moved a large part of its level two exposure into Hyperliquid. He described Hyperliquid as one of the tokens he has talked about before and said the platform’s structure stands out in the sector. Explaining why Galaxy supports it, Novogratz said he backed Hyperliquid “mostly because it’s got an economic model,” contrasting it with other tokens he called more like “association tokens.”
The executive added that Hyperliquid offers a glimpse of what the future of crypto could look like, framing it as a more substantial approach compared to projects that work differently. Galaxy Digital’s relationship with Hyperliquid goes beyond just investment. The company has significant exposure to Hyperliquid’s native token, HYPE, and also acts as a validator on the network.
Bitcoin Over $100,000 Again?
Novogratz also talked about Bitcoin’s (BTC) current price. He noted that if Bitcoin manages to climb back above $100,000, it might still struggle to hold that level depending on broader economic conditions.
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He pointed out that to reach that price, “you’re going to need a few things to happen,” and stressed that easing from central banks would be key. However, he warned that macroeconomic pressures are unlikely to ease quickly, citing inflation concerns tied to current events. The Galaxy Digital CEO mentioned the war in Iran and said, “we’ve got some pretty ugly inflation prints that are going to come through the pipeline,” adding that, in his view, “I don’t think the Fed does anything but sits and watches.”
Despite the quarterly loss, Galaxy Digital’s stock (trading under the ticker GLXY) rose about 4% during Tuesday’s trading session, reaching $26 per share. Meanwhile, Hyperliquid’s native token fell 5% and dropped to $39.
Featured image from OpenArt, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs based on the topic ranging from basic to more advanced with clear and direct answers
1 What exactly happened with Galaxy Digitals 200 million loss
Galaxy Digital reported a 200 million loss for the quarter This was primarily due to a combination of falling cryptocurrency prices a decline in the value of their investment portfolio and losses from their trading and lending operations
2 Could Hyperliquid have prevented this loss
Not directly Hyperliquid is a decentralized exchange for perpetual futures trading It could not have prevented Galaxys portfolio losses from market drops However it might have helped Galaxy manage risk better by offering a transparent onchain venue for hedging positions without relying on a single counterparty
3 What is Hyperliquid in simple terms
Hyperliquid is a platform where people can trade crypto derivatives directly from their wallets without a middleman Its fast transparent and all trades happen on a blockchain
4 How would Hyperliquid help avoid a crisis like Galaxys
A crisis often comes from hidden risks like a trading partner defaulting or a centralized exchange freezing funds Hyperliquid is noncustodial and transparent This reduces the chance of a sudden hidden collapse
5 What specific problem did Galaxy face that Hyperliquid addresses
Galaxy likely had counterparty riskthey were exposed to other firms that might have failed or delayed payments Hyperliquid uses a decentralized automated system where trades settle instantly onchain removing the risk of a single counterparty failing
6 Is Hyperliquid safer than a regular exchange like Binance or Coinbase
For certain things yes Hyperliquid is safer against exchange hacks or freezes because you control your own funds But its riskier for beginners because you are fully responsible for your private keys and trading decisionsno customer support to reverse a mistake
7 Can a firm like Galaxy actually use Hyperliquid for institutional trading
Yes but with limits Hyperliquid has high liquidity and low fees which attracts institutions However its still a newer platform with less volume than major centralized exchanges Galaxy could use it for hedging but might not be able to execute very large trades without moving the market