GLXY stock gained in pre-market trading on Wednesday after Citi said Galaxy Digital’s diversification is a double-edged sword in a note to investors.
- Citi said that Galaxy Digital’s “breadth” across trading, asset management, investment banking, and principal investing provides strategic resilience.
- However, it added that the same diversity adds “complexity” and can “dampen torque” during sharp market moves.
- Citi has put a price target of $25 on the GLXY stock, implying a potential upside of 15% from Tuesday’s close.
Shares of Galaxy Digital (GLXY) moved higher early morning on Wednesday, on track to break even for the week, after Citi initiated coverage of the stock with a ‘Neutral’ rating and a price target of $25.
GLXY’s stock gained 1.25% in pre-market trade, following a jump of nearly 6% on Tuesday. On Stocktwits, retail sentiment around the shares remained in ‘bearish’ territory over the past day. Like other crypto-linked equities, Galaxy’s shares have been falling this month, down nearly 20%, amid Bitcoin’s (BTC) selloff and the broader crypto market downturn.
Bitcoin’s price was up 3.5% in the last 24 hours, trading at around $65,400 on Wednesday morning. Retail sentiment around the apex cryptocurrency improved to ‘neutral’ from ‘bearish’ territory over the past day as BTC recovered from trading below $64,000.
Galaxy’s Diversification Seen As Double-Edged Sword
Analyst Peter Christiansen said in a research note cited by TheFly that Galaxy’s diversified business model is both a bane and a boon during volatile crypto markets. He stated that the company’s “breadth” across trading, asset management, investment banking and principal investing provides strategic resilience. At the same time, that diversification adds “complexity” and can “dampen torque” during sharp market moves.
Christiansen said Galaxy could underperform “single-engine beneficiaries” during periods when crypto markets rally on narrative catalysts such as ETF headlines, regulatory speculation, or macro-driven price spikes.
For example, digital asset treasuries, crypto exchanges, or mining stocks often see sharper gains during such speculative surges. For Galaxy, exposure to multiple verticals may smooth earnings over time but can also dilute the impact of sudden bullish swings.
Longer-Term Upside Hinges On Institutional Adoption
GLXY’s stock has fallen around 6% year-to-date, while Bitcoin proxy Strategy (MSTR) has seen a dip of nearly 20% and Ethereum (ETH)-backed digital asset treasury Bitmine Immersion Technologies (BMNR) has dropped over 30%.
Over the long-term, Citi sees potential for Galaxy to benefit from structural growth in institutional crypto adoption. Christiansen stated that regulatory clarity could translate into sustained institutional wallet share gains, deeper derivatives and structured product demand.
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