Galaxy Digital reported a $216 million net loss for the first quarter of 2026, with the decline driven largely by a roughly 20% drop in digital-asset prices. The result, disclosed in the company’s Q1 filings shows how exposed institutional crypto firms remain to mark-to-market pressure, even as new on-chain trading venues begin to influence earnings.
The biggest hit came from Galaxy’s Treasury & Corporate segment, where lower crypto valuations weighed heavily on reported results. The segment posted an adjusted gross loss of $140 million and an adjusted EBITDA deficit of $167 million, underscoring the pressure that falling asset prices can place on balance-sheet-driven crypto businesses.
Hyperliquid Helps Offset a Deeper Loss
Against that backdrop, Galaxy’s exposure to Hyperliquid stood out as the quarter’s key positive contributor. Trading activity and token-linked positions connected to the decentralized exchange helped reduce what otherwise could have been a larger deficit.
CEO Mike Novogratz said Galaxy’s reallocated exposure to Hyperliquid “way outperformed what we would have done if we had not cut some positions.” He also pointed to the platform’s structure, saying Galaxy supported Hyperliquid because “it’s got an economic model, unlike many of the other tokens.”
Hyperliquid’s performance was tied to its dedicated Layer-1 architecture, on-chain order book, sub-second execution and lack of per-trade gas fees. Its low-fee structure, deep liquidity and leverage features helped attract flow from centralized derivatives venues, while the HYPE token’s buyback-and-burn mechanics added to its appeal.
The quarter also included a reported year-to-date rally in HYPE, which contributed to Hyperliquid’s positive effect on Galaxy’s P&L. That marks a notable shift: on-chain derivatives infrastructure is no longer just a market narrative, but a visible earnings variable for institutional firms.
Galaxy Looks Beyond Crypto Price Cycles
Galaxy is also trying to reduce its dependence on directional crypto exposure. In April 2026, the firm began recognizing revenue after delivering its first data hall to CoreWeave, an AI-native cloud provider.
Novogratz framed the shift bluntly: “The world is in an AI revolution, and we plan on riding that wave and paddling our canoe as fast as possible.” The comment reflects Galaxy’s broader effort to build revenue streams that are less correlated with crypto market swings.
For market participants, the quarter carries two clear signals. First, institutional engagement with on-chain derivatives venues such as Hyperliquid is becoming more financially material. Second, crypto firms are increasingly moving into adjacent infrastructure businesses, including AI data centers, to stabilize revenue.
Galaxy’s Q1 loss shows that digital-asset volatility still dominates earnings, but the offset from Hyperliquid and the emerging CoreWeave revenue stream point to a changing business mix. If on-chain venues keep gaining flow and AI infrastructure revenue scales, Galaxy may become less dependent on pure crypto market direction over time.