Galaxy Digital : First Quarter 2024 Investor Call - Transcript

EDITED TRANSCRIPT

GLXY - Galaxy Digital Holdings Ltd

First Quarter 2024

Shareholder Update Conference Call

EVENT DATE/TIME: May 14, 2024, 8:30AM ET

GALAXY DIGITAL | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

C O R P O R A T E P A R T I C I P A N T S

Michael Novogratz, Founder and Chief Executive Officer

Christopher Ferraro, President and Chief Investment Officer

Alex Ioffe, Chief Financial Officer

Jonathan Goldowsky, Head of Investor Relations

C O N F E R E N C E C A L L P A R T I C I P A N T S

Andrew Bond, Rosenblatt Securities

Martin Toner, ATB Capital Markets

Joseph Vafi, Canaccord Genuity

Owen Lau, Oppenheimer

Bill Papanastasiou, Stifel Financial Corp.

P R E S E N T A T I O N

Operator

Good morning, and welcome to Galaxy's First Quarter 2024 Earnings Call.

Today's call is being recorded. After the presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two.

At this, I would now like to turn the conference over to Jonathan Goldowsky. Head of Investor Relations. Please go ahead.

Galaxy Investor Relations

Good morning, and welcome to Galaxy's First Quarter 2024 Earnings call.

Before we begin, please note that our remarks today may include forward-looking statements. Actual results may differ materially from those indicated or implied by our forward-looking statements as a result of various factors, including those identified in our filings with the Canadian Securities Regulatory Authority on SEDAR+ and available on our website or in future filings we make with other securities regulators.

2

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

Forward-looking statements speak only as of today and will not be updated. In addition, none of the information on this call constitutes a recommendation, solicitation or offer by Galaxy or its affiliates to buy or sell any securities, including Galaxy Securities.

With that, I'll turn it over to Chris Ferraro, President and CIO of Galaxy.

Chris Ferraro

Thanks. We're changing up a little this morning, so I'll start by wishing everyone a good morning from sunny New York.

Before I jump into our business results and performance, I want to spend a few minutes discussing the recent equity capital raise we completed last month.

Over the past several months, we have seen a confluence of sizable growth opportunities across our business amidst a backdrop of accelerating digital asset adoption globally. And in mid-April, we executed a strategic equity capital raise of US$125 million to help us capitalize on these trends. In our global markets business, the opportunity set has expanded dramatically. Client spot and derivative flow volumes, position financing, asset sales indications, and on-chain liquidity pool provisioning, just to name a few, have all begun to show strong recurring demand growth.

In addition, and consistent with our platform objectives, we recently crossed $8 billion in trailing 12-month notional over-the- counter derivatives traded, requiring us to register as a swap dealer in the U.S. and comply with a new set of regulatory requirements. These obligations will drive additional operating expenses and capital requirements, but, importantly, will enable us to provide increasingly larger institutional clients an opportunity to engage with us in an established and regulated trading business, a format that many of the world's largest asset managers, hedge funds, and allocators already operate within and, in fact, require at scale.

And you don't have to just take our word for it. In the preceding months, the trading desk carefully manages derivatives business opportunities, allowing it the necessary time to implement its swap-dealer framework prior to exceeding the de minimis threshold. Post-exceeding the $8 billion threshold, we have seen a significant uptick in client activity leading to an approximate 25% increase in notional derivative volumes relative to the 12-month period prior to crossing.

Outside of the U.S., we are pursuing various sets of licenses to operate client businesses in Europe and Asia to bolster our product and service offerings in two regions that are experiencing meaningful growth and adoption of digital assets. And in addition to expanding our business operations in the U.S. and internationally, we are also investing a portion of the capital we raise in the next phase of expansion of the Helios mining facility's infrastructure, which I'll provide more detail on in a few minutes.

We are expecting returns on these investments to be well above our cost of capital, which we believe will drive significant shareholder value over the long term.

Finally, Galaxy has a six-plus year track record of being good stewards of our balance sheet. Over the past two years, while some of our peers have raised billions of dollars through at-the-market offerings to scale their businesses, Galaxy had repurchased approximately 12 million shares of our stock at an average price of CAD$6.44 and leveraged the gains on our investments, digital assets, and operating businesses to fund our growth. The roughly 12 million shares we repurchased over the past two years and just reissued to the market through this most recent equity raise represents a return on investment of over 100%.

3

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

Now, while we absolutely do not intend to prioritize trading our stock with investors for profits, we do recognize more than anyone the cost of not myopically and maniacally focusing on building an industry-leading franchise. We have employed capital market activities when either the returns on our stock were unavoidably attractive or when the opportunity set to grow our business was unavoidably rich, as it is now.

Moving on to our first quarter results, let's start with global markets. Our trading desk strategically positioned itself to be a beneficiary of the positive momentum in market conditions and digital asset prices throughout the first quarter, generating $66 million in counterparty trading revenue in Q1. This 79% increase, quarter-over-quarter, was primarily driven by continued growth in our derivatives book, where we earned more revenue in one 1Q '24 than we did in all of 2023. In line with this increase in revenue, we also saw counterparty trading volumes increase 78% quarter-over-quarter. Our desk continued to onboard new counterparties, bringing our total count to over 1,160 at the end of March.

This continued growth in client trading volumes and engagements with our desk is confirmation that Galaxy is earning more wallet share amongst our existing clients, and that we're becoming the trusted partner to new institutional asset managers and hedge funds as they begin to enter the space.

Our lending business has also been a beneficiary of increased institutional activity, with our average loan book size growing to $664 million, up 5% quarter-over-quarter. And we continue to make meaningful progress on the build of GalaxyOne, our institutional client platform, and ended Q1 with approximately 75 clients with over $1 billion of fair market value assets being serviced by the platform.

Moving on to our other segment of the global markets business, our investment banking business. Our team successfully closed one deal in the quarter, having served as an advisor to CryptoSlam, the leading aggregator of NFT data across blockchain ecosystems, who received a strategic investment from Spirit Blockchain Capital. In Q1, rising crypto market optimism spurred M&A interest with even traditional non-crypto firms looking at M&A opportunities to enter the space at scale. On the capital markets front, we are seeing a tale of two markets, strong valuations for tokens and early stage raises, reminiscent of 2021, while generalist investors have not yet returned to growth stage companies.

Our expectation is that capital deployment and acquisition appetite will increase with a prolonged positive market sentiment, which we anticipate will drive pipeline monetization for the business and growth in the second half of the year and into 2025.

Turning to our asset management business. We ended the first quarter with $7.8 billion of assets under management, a 50% increase quarter-over-quarter. This increase in AUM was primarily driven by GAM being awarded an additional mandate in the FTX bankruptcy process, net inflows into our global range of ETFs and market appreciation. As I mentioned on our last call, over the past few months, Galaxy's asset management's mandate to monetize FTX estate's digital asset holdings for creditors has increased in both scope and complexity. In addition to managing certain assets within FTX's liquid portfolio, as well as various trust assets, in January we were awarded a third mandate to wind down the estate's sizable locked token positions.

In the first quarter, we kicked off the first of many dispositions of those locked assets. And although this brought our AUM down from our record $10.1 billion in February, the decrease in assets is a reflection of the team's successful execution in aiding creditors in reclaiming their funds. Additionally, the associated fees were meaningful revenue drivers for the business, as evidenced by a 113% increase in GAM's management fees quarter-over-quarter.

As of quarter end, the value of assets tied to the various FTX mandates we are managing was $3.4 billion. Although, the assets under management and fees tied to the FTX mandates will decrease over time, as we continue to monetize the

4

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

portfolio, we are the only firm with a proven track record of executing a multi-billion dollar, complex bankruptcy mandate in the crypto space, which we believe has bolstered our franchise value significantly.

Building on GAM's existing partnership footprint in Canada, the U.S., and Brazil, on April 4th, GAM announced the European launch of Bitcoin and Ethereum ETPs with DWS Group's XTracker franchise. X Tracker is a leader in ETFs globally with $200 billion in AUM, and we couldn't be more excited to scale and grow these products together.

Finally, on the venture side of our business, we are currently raising external capital for our inaugural Crypto Venture Fund. As you recall, in 2023, our proprietary crypto venture franchise moved into the asset manager with the intention of opening their investing program to external LPs. We are currently raising capital for this inaugural vehicle, which will complement our existing interactive and crypto-funded fund franchises. We think the market opportunity for the fund is $150 million to $200 million, and institutional interest from the allocator community early on has been stronger than expected. We are on schedule for a quick first close in Q2.

Galaxy Asset Management is well positioned to leverage its strong track record to capture new institutional demand in this next wave of growth. With over $2.7 billion in passive AUM, $3.6 billion in active AUM, and $1.5 billion in venture, Galaxy is one of the largest and fastest-growing digital asset managers globally.

And finally, turning to our digital infrastructure solutions business. Our mining team continues to demonstrate success in operating and scaling the Helios facility and in the first quarter reported record revenue of $31.5 million. This represents a 69% increase quarter-over-quarter and an over 200% increase when compared to the same quarter prior year.

For the first quarter, our power purchase costs and external hosting expenses, net of curtailment credits were approximately $15 million, resulting in a 52% direct mining profit margin. Our strong mining margin quarter-over-quarter continues to position us as a leading Bitcoin miner globally. We maintain a low average marginal cost to mine of less than $19,500 per Bitcoin, with the quarter-over-quarter increase driven primarily by all-time high network difficulty.

As everyone already likely knows, the Bitcoin halving occurred on April 19th, resulting in the Bitcoin block subsidy dropping from 6.25 to 3.125 Bitcoin roughly every 10 minutes when a new block is found. All else being equal, this means that, predictably, the first post halving block reduces the block subsidy portion of the block reward by 50%. From there, there are several factors that impact the collective industry's go-forward profitability, including transaction fees, Bitcoin price, network difficulty, machine efficiency, and energy prices.

So what does this mean for Galaxy mining? Well, to give everyone a tangible sense, our preliminary mining gross profit for April, which included 19 days pre-halving and 11 days post-halving, was still largely in line with our March profitability. While we do acknowledge that heavy on-chain fee activity did help to offset much of the halving impact and are generally less predictable today, as we've discussed, Galaxy's mining assets also benefit from an attractive power market and our proprietary active power management software, which allows us to adjust our operations based on real-time profitability and either mine Bitcoin or curtail. And also helpful, the first post-halving Bitcoin network difficulty adjustment occurred on May 9 and resulted in a 6% downward adjustment in line with our previous expectations.

In the first quarter, we continued to add both proprietary and host Hashrate, bringing total Hashrate under management to

5.7 exahash per second, representing nearly 1% of the entire Bitcoin network. Helios currently has 180 megawatts of energized mining capacity, and we have started construction on the next phase of our substation to bring on an additional 300 megawatts of high-voltage capacity in the third quarter of next year. We believe this project in and of itself will add significant incremental value to our asset base and will set the foundation for our growth opportunities at Helios while we

5

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

monitor the Bitcoin mining and capital market conditions closely to determine how best to prudently expand our operating data center capacity in the future.

Development of that substation capacity is well underway. We have already purchased and taken delivery of some of the long lead-time electrical infrastructure, including four main power transformers, which are fully paid for and already installed at the Helios substation. We're also excited to share that in Q1, we purchased an additional 160 acres of land adjacent to Helios. This gives us the optionality to further scale our mining operations, but also to opportunistically pursue other high- power computing business models that rely on access to quality infrastructure and inexpensive power.

Our blockchain infrastructure business beyond Bitcoin mining also had a strong quarter and continues to position Galaxy as one of the most trusted nodes in the decentralized ecosystem. Our assets under stake doubled relative to the prior quarter to reach $486 million. And as I previewed on the last earnings call, we had line of sight to scale this number further and I'm now pleased to share that as of April 30th, our assets under stake has grown to $1.5 billion, with Galaxy growing to become the number two validator globally on the Solana network.

The performance of each of our operating businesses this quarter highlights how our diversified business model is uniquely positioned to benefit from the institutional capital we are seeing begin to flow into the ecosystem. My conviction in what we have built at Galaxy and our ability to execute has never been higher.

I'll now turn the call over to Alex to cover financial results and then he'll turn over to Mike to close. Alex?

Alex Ioffe

Thank you, Chris. Good morning.

We had a great quarter. We reported net income of $422 million, up $120 million quarter-over-quarter, and an increase of $287 million compared to the same quarter last year. This was primarily driven by market appreciation and growth in our operating businesses. Chris covered most of it, to highlight a few key trends.

First, in this past quarter, we had the launch of the SPOT Bitcoin ETF in the U.S., which facilitated adoption of the largest crypto asset by mainstream investors. We believe full-scale adoption of the Bitcoin ETF will take time to propagate, and it is a beginning of a multiyear cycle with institutional allocators and wealth platforms. We expect there to be market retrenchments along the way, but we believe that the demand for this product will continue to increase.

Second, our trading, asset management, mining, and staking operating businesses made significant gains in the past quarter. Our equity capital was $2.2 billion as of March 31, up $400 million quarter-over-quarter. And after the quarter ended, as Chris noted, we raised $125 million of additional equity capital. Total liquid assets were $1.5 billion at the end of this quarter, up from $910 million at the end of 2023, and consisting of $163 million in cash, cash equivalents, and stablecoins, $821 million of net digital assets, excluding stablecoins, and $515 million of spot Bitcoin ETFs that started trading this quarter.

We continue to make progress on our U.S. listing. We have thought and received preclearance from the SEC on a number of accounting issues. In April, we received significantly fewer comments from the SEC on our latest round of comments compared to the prior round. This was the sixth round of comments from the SEC. We can't be sure that the comments will continue to decrease, but we are encouraged by the progress we have made. Yesterday, we filed our responses to the latest round of SEC comments, along with a registration statement, updated for the full year 2023, and for the latest

6

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

accounting guidance. Of note, starting in 2023, for the U.S. GAAP financials included in the latest step four, we early adopted fair value accounting for digital assets, covered by a new accounting standard published by FASB at the end of last year.

Now to Mike. Thank you.

Mike Novogratz

Good morning, everybody.

Listen, we changed the order up a little bit today, because I wanted Chris to lead off with what a strong quarter we had, and I wanted to talk and put that in context of how I see the business right now, and how I see Galaxy and how I see it going forward.

Crypto is a very interesting industry in that the main asset, Bitcoin in the crypto space, really drives a lot of things. It drives activity in all your different businesses. It drives enthusiasm for the space. It drives adoption. And so when markets are going up, businesses always feel great. Markets don't always go up. And so what's important to note, and I think this is really important, is sometime in the last, I'd say three to nine months, our Company and the whole industry crossed a rubicon, where while we are still going to have quarterly results that are somewhat correlated to the price of crypto because activity goes up and down with crypto prices, my confidence that institutions are coming for long-term stays has increased immensely.

We've seen it in our own business, people willing to lend us crypto for long periods of time, unsecured. That didn't happen six months ago, and it's happening now. Counterparty is growing, engagement around the space, just at a different level than it was before. And so it makes it easier for us to invest long term. It makes it easier for us to really have a strategy that we can think, hey, in two years, we have a good sense of where things are going much harder two years ago. And so if there's one message to take is that while we will still have volatility in Bitcoin price and hence volatility and earnings, the whole industry will, I feel really confident that it's heading in a pretty bright direction.

Listen, we had a great quarter, right. Asset management fees had a record, mining revenue had a record. We really jumped bootstrapped and got into the staking business in big way. Our derivative business is jumping to a new level, trading opportunities are abound and so all feels pretty good.

Where's Bitcoin right now, right, 62,000 at end of the quarter at 73,000 and where's it going? Listen, we had a lot of tailwinds in Q4 and Q1. The adoption of the ETF by far the biggest, right, that was the giant kind of wake-up call that this is now an institutional asset. We also had the halving that we've now put in the rearview mirror. There was also a view that the Fed would bring rates down significantly this year and that view has changed. It's changed in the market. It's changed here in Galaxy. And so I think we're at a consolidation phase in crypto.

Bitcoin, Ethereum and everything else, Solana, will consolidate. What does that mean? It means probably somewhere between 55 and 75 until the next set of circumstances, the next set of market events brings us higher. And so when we're in those periods there's still trading opportunity but I figure on, I always use these words, it's a grind and it's time to build, and we are frantically doing both of those things. But I say grinding, it's coming in every day, being in touch with clients, trading the opportunity set you see but more importantly it's the build, it's the technology build, it's the relationship build, it's the corporate opportunities build and I think that's probably where we are certainly for this quarter, maybe next quarter, until A, either the Fed starts cutting rates because the economy finally slows or B, we get through the election and I think the election will bring clarity, one way or the other, to the crypto regulatory landscape.

7

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

And so, I'll leave it there. We had a great quarter; the business feels good. I think there's nothing on the horizon that gets me panicked, oh my God, crypto could crash, don't see it, prices can go up and down with the macro forces. We continue to see adoption growing. As Alex talked about, the ETF got launched. Big players are just now starting to put it through their system. You've read about Morgan Stanley, who's just getting started. And so, that whole process of wealth managers selling it to their clients isn't an overnight process. And so, feel pretty good, both here in the U.S. and more importantly, abroad that, crypto has found a lane in people's portfolios and will continue to grow.

And with that, I'll turn it over to Q&A.

Operator

We will now begin the question-and-answer. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster.

The first question comes from Andrew Bond with Rosenblatt Securities. Please go ahead.

Andrew Bond

Hey, thanks, and good morning, guys. Chris, I believe you mentioned that platform derivative volume Q1 almost greater than all '23. Are you seeing a greater percentage of this volume and kind of your revenue being driven by more traditional institutional market participants and market makers as counterparties post-ETF approvals, and is this kind of where you're seeing growth or expect to see more growth with your additional regulatory approvals?

Chris Ferraro

Yes, good morning, Andrew. Thank you, man. Yes, I'd say early on it's a bit of a mix. There are existing market participants who are more and more using more capital-efficient ways to get their positions on and hedge their positions. We are seeing institutions who previously were not participating coming in and using more and more derivatives and basic exotics to create their positions, but it's like very early stages on that front. And so we were holding the dam back truthfully, proactively on what we were doing in that business, specifically to get ourselves ready from a regulatory compliance and from a tech perspective for swap deal registration. We're going to be actively registered starting June 1, and once we let that dam down, like we said, sort of the business expanded 25% very quickly and that whole apparatus is being set up to accept traditional financial institutions coming into the space and like I said, that's been very early stages. So a mix of both but not anywhere near what we expect the market to do and what we expect the platform to be built for.

Andrew Bond

Got it. And just to follow up maybe for Mike, you kind of talked briefly on the political and regulatory environment, obviously a lot going on, heading into the election cycle. I just wanted to see if you could share your view on, your thoughts on what the best outcome would be for crypto markets and your businesses as we head into the cycle here?

Mike Novogratz

Yes, let me talk a little bit about like politics and crypto over the last 10 days because I think something significant happened. And it's interesting, it's been kind of a buildup, right? Crypto should be bipartisan and apolitical, right. There's a libertarian streak, right, freedom and privacy to Bitcoin. And there's a cut out the middleman, really progressive side to so many of

8

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

these crypto ecosystems, right. If it's in music or in finance and how do we cut out the middleman, right, which should be seen as progressive. And so that has been politicized is a damn, damn shame. I blame that almost squarely on Elizabeth Warren and Gary Gensler, to be honest. And I don't think the Dems realized it was a problem. And just last week, there's a thing called SAB121. It's an accounting rule that forces institutions to hold crypto as an asset and a liability on the balance sheet, even if it's in custody. And so that's stopped banks, like Bank of New York, the biggest custodian in the world from custody and crypto is a-it's going to blow their balance sheet up and it's going to look really foolish.

Republicans put forth a bill to overturn that accounting rule and, President Biden said he'd veto it. And I'm thinking, like, the insanity of a president vetoing an accounting rule. But it just read to the crypto community as the Democrats saying no to crypto. And it's unfair. There are tons of Democrats that are pro-crypto, guys like Ro Khanna and Ritchie Torres. And there are lots of them. But the power has been held by Elizabeth Warren, the Senate Banking Committee and Gensler and a few others. And so I think you saw something. The same day Trump came out with Ryan Selkis alongside him and gave a speech that said, I'm the pro-crypto president. And there was just a shift. There was a shift in the Twitter space. There was a shift in people I spoke to saying, wow, Republicans good, Democrats bad. I think that's kind of dangerous thinking in that broadly for our industry to thrive you're going to need bipartisan support because you can't go from one regime to the next and not knowing where you stand.

But it's definitely heightened the power of crypto, right. There's been over $150 million. It will be $250 million, I bet, within two months of PAC money, super PAC money raised. You can credit Brian Armstrong in his effort, but there's other efforts as well to be spent in this election. And so races like John Tester's and Sherrod Brown's, key democratic states for the Dems are seeing a ton of crypto money pouring in. And, I was talking to a senator, a friend of mine yesterday, I was like, guys, this is the definition of stupidity if you're a Democrat. It is literally like saying, hey, we're the party against dogs, right. There are more crypto users in America than there are dog owners. Can you imagine a party coming out and saying, oh, we don't like dogs. Like, it's just terrible politics, but that's where we're at.

And so I think you're going to see this issue stay politicized unless the Democrats can do a real pivot. I think they finally are waking up because this week they heard it, but we'll see. Like, on its face, Trump has now said he's going to be a pro-crypto president. And so you probably get better and faster regime shift if Trump wins than if Biden wins, right? Does it happen overnight? Nothing happens overnight. But he's broadly wanted to endorse it. And so I think if you're crypto and you're a one-issue voter, the Republican ticket is looking better than the Democratic ticket at this point.

Andrew Bond

Awesome. Thanks guys.

Operator

The next question comes from Martin Toner with ATB Capital Markets. Please go ahead.

Martin Toner

Good morning, folks, and congrats on another strong quarter. I'd like to ask a couple questions around costs. Can you talk a little to costs in infrastructure? The $40 million, I mean, where is it going? And how much of it is unrelated to power? And then what are you doing with it?

Alex Ioffe

9

GALAXY | galaxy.com

Galaxy Digital Holdings Ltd. - Shareholder Update Conference Call, May 14, 2024

Yes, so the increase in costs from prior year are driven primarily by mining in three pieces. There are more electrical costs. There's greater depreciation because we have more machines online. And last year, there was this funky thing where we had to reverse impairment on the mining machines that we wrote down in 2022 when the Bitcoin prices were down. And hence, the useful effectiveness of those machines was somewhat curtailed, right. But in 2023, when the prices increased, we were able to reverse those impairments back to the original cost basis. That's under Canadian rules in the U.S. That's not allowed. Once you write something down, it stays down. But in Canada, and that was the other piece of the difference.

Martin Toner

Got it. Okay, thanks so much. Next question is on global markets. Given that the price of digital assets has kind of stabilized, lack of a better term here, volumes, institutional retail have gone down. Just wondering what impact that's going to have on your business here in Q2.

Mike Novogratz

Yes, listen. I said that in my opening remarks, our business is still correlated with both price and volatility. And so when we go into consolidation periods, you see volumes of overall crypto trading goes down and our activity goes down. Now listen, we're still young enough business and we're bringing on new customers. So we're going to try to kind of offset the macro of less activity overall with the micro of bigger market share. And so as we are expanding, Leon Marshall is now our head of sales based in London. He's bringing on new clients every week. And so we're trying to balance that off. But overall, when you see Bitcoin price goes sideways or lower, you can expect activity to come down.

Chris Ferraro

Yes, Martin, the only thing I'll add to Mike's comments is your question focused mostly on global markets. But if you zoom out to the overall business. We've made a concerted effort to build and add business lines that help balance and add ballasts to sideways down markets generally. And so the asset management business, while it's exposed to some data, has had a significant ramp in AUM, which has just started flowing through from a P&L and profitability standpoint in the first quarter. And so that's a good ballast to the more volatile trading business. Our mining business correlates to Bitcoin, but has its own consistent profitability dynamics based on our cost structure and the way we built that business.

Our illiquid portfolio, I'll highlight, is one that generally lags the public markets. And so while we've had some appreciation in that portfolio, a lot of the marks and a lot of the exposures there, we don't expect to come through and show up relative to the public markets for one or two quarters later. And so on a go-forward basis like there's an expectation that that part of the business too is going to start flowing through and offset what is overall general market slowness.

So I think the overall platform, you should expect to be more balanced and more consistent in production these days than they have been in the past.

Martin Toner

Fantastic. Thank you. Last one from me. How do you guys think about market share in institutional trading volumes?

Chris Ferraro

I'll start with that one, and maybe Mike could add. I think it's just very early. There's far, far, far more white space than there is filled space and it being a zero-sum game for market participants, and so it's a hard metric to measure when you're talking

10

GALAXY | galaxy.com