Galaxy Digital explores tokenizing its own GLXY shares, stock falls on Q2 earnings

Galaxy Digital, which recently began trading on the Nasdaq, told the U.S. Securities and Exchange Commission it is exploring the tokenization of its own shares and has engaged Superstate Services, a registered agent, to potentially help manage the initiative, according to a filing from Tuesday.

"We are evaluating the feasibility of tokenizing our Class A common stock," Galaxy Digital said in an SEC filing. "Tokenized GLXY would provide an additional mechanism for investors to hold and trade shares in the company."

Galaxy Digital (ticker GLXY), which is run by billionaire CEO Mike Novogratz, went on to say that in May it "entered into a Digital Transfer Agency Agreement with Superstate Services" as its digital asset transfer agent. Superstate Services is the SEC-registered transfer agent for the real-world assets (RWAs) platform Superstate.

Novogratz said in May his company was interested in turning Galaxy Digital "shares into tokens that could be used in decentralized-finance applications, such as lending and trading."

Also in May, Superstate, which was previously best known for its suite of tokenized private funds including USTB and USCC, launched Opening Bell, a platform that enables the trading of SEC-registered shares onchain.

Thought leaders from both the digital assets industry and from the world of traditional finance see the tokenization of U.S. equities as a major growth area worth possibly trillions of dollars. Tokenized stock trading happens 24/7 and is oftentimes open to non-U.S.-based traders, unlocking the potential for added volume.

"The market for tokenized securities is nascent, and there can be no assurance that a liquid or orderly market for tokenized GLXY will develop or be sustained," Galaxy Digital said in its filing. "Blockchain-based mechanisms, like decentralized exchanges, may have significantly less liquidity, volume, transparency or regulatory oversight compared to national securities exchanges, such as Nasdaq."

Galaxy Earnings

Galaxy Digital also reported its second-quarter earnings on Tuesday, posting revenue of $8.7 million, which was relatively flat year-on-year. The report didn't show a straight revenue comparison showing the difference between this year's second quarter and first quarter. The company did say, however, that its "Gross Revenues & Gains" dropped 30% when compared to the previous quarter.

Galaxy Digital's total assets slid by 43% to $6.3 billion in the second quarter, but the company executed the sale of "over 80,000 bitcoin on behalf of a client, representing one of the largest notional bitcoin transactions in the history of digital assets," the company said.

The company registered a positive net income result of $30.7 million after reporting losses both during the previous quarter and in the year-ago period.

Galaxy Digital shares declined 9%, trading hands at $26.26 as of 11:13 a.m. ET on Tuesday, according to . The company has a market cap of around $10 billion, according to The Block's GLXY price data.

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