Galaxy Digital : Q4 (GDH LP MD A 12 31 2024 vFINAL2)

Published: 2025-04-04 05:52:05 ET GLXY.TO

Galaxy Digital Holdings LP Management's Discussion and Analysis

For the Years Ended December 31, 2024 and 2023

March 27, 2025

Table of Contents

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Cautionary Note Regarding Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....

Risks and Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

AnnualHighlights & Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Discussion of Operations & Operational Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Industry Performance and Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Market Overview . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Industry Outlook & Recent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Performance by Reportable Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....

Financial Instruments, Digital Assets and Risk . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Critical Accounting Estimates and Accounting Policies, including Initial Adoption . . . . . . . . . . . . . . . . . . . . .....

Digital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Disclosure Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Management's Responsibility for Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Other Information and Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Introduction

This Management's Discussion and Analysis ("MD&A"), dated March 27, 2025, relates to the financial condition and results of operations of Galaxy Digital Holdings LP ("GDH LP" or together with its consolidated subsidiaries, the "Partnership"), is intended to supplement and complement the Partnership's consolidated financial statements for the year endedDecember 31, 2024 and should be read in conjunction therewith. This MD&A was written to comply with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. The consolidated financial statements and MD&A are presented in U.S. dollars, unless otherwise noted and have been prepared in accordance with IFRSAccounting Standards. The results presented for the year endedDecember 31, 2024are not necessarily indicative of the results that may be expected for any future period.

The Partnership's certifying officers, based on their knowledge and, having exercised reasonable diligence, are responsible to ensure that the financial statements and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the periods covered by these filings, and the financial report together with the other financial information included in these filings fairly present in all material respects the financial condition, financial performance and cash flows of the Partnership, as of the date of and for the periods presented in these filings.

In this MD&A, a reference to "Galaxy", "we", "us", "our" and similar words refer to the Partnership, GDH LP, its subsidiaries and affiliates, or any one of them, as the context requires.

Cautionary Note Regarding Forward-Looking Statements

This MD&A contains certain forward-looking information and forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and "forward-looking information" under Canadian securities laws (collectively referred to herein as "forward-looking statements"). These forward-looking statements relate to future events or the Partnership's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans," "expects," "budget," "scheduled," "estimates," "continues," "forecasts," "projects," "predicts," "intends," "anticipates," "believes," or "seeks," or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may," "could," "would," "should," "might," or "will" be taken, occur or be achieved. The forward-looking statements contained in this MD&A are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future, including statements about Galaxy's pre-released financial information, Galaxy Asset Management's strategy to scale, Galaxy's exchange-traded funds products, Galaxy Digital Infrastructure Solutions' strategy to scale, including the Lease Agreement (as defined below) and the expansion into the artificial intelligence ("AI")/high-performance computing ("HPC") data center business, Assets Under Stake ("AUS") and its go-forward strategy, the focus on emerging areas of blockchain infrastructure, staking, market and industry outlook, including the adoption and utilization of blockchain technology, decentralized finance technologies, and digital asset protocols, geopolitical events, the velocity of development of new digital asset regulations, market-wide liquidity problems, prospective regulation or approvals, our ability to complete the Reorganization (as defined below), domestication and related transactions (the "Transactions"), the impact of qualified opportunity zones on future distributions, reduction in available credit or expectations regarding the industry, company performance and plans, or remediation plans. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to: (1) risks related to retrofitting our Helios campus from bitcoin mining operations to AI/HPC data center infrastructure and operations, including the timing of construction and its impact on lease revenue; (2) any inability or difficulty in obtaining financing for the expansion into the AI/HPC data center business on acceptable terms or at all; (3) changes to AI/ HPC data center infrastructure needs and the impact on future plans at the Helios campus; (4) risks associated with the leasing business, including those associated with the Lease Agreement and other counterparties; the inability to complete the Transactions, due to the failure to obtain shareholder and stock exchange approvals, or otherwise; (5) changes to the proposed structure of the Transactions that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining shareholder or stock exchange approval of the Transactions; (6) the ability to meet and maintain listing standards following the consummation of the Transactions; (7) the risk that the Transactions disrupt current plans and operations; (8) costs related to the Transactions, operations and strategy; (9) changes in applicable laws, regulations or legal proceedings; (10) the possibility that the Partnership may be adversely affected by other economic, business, and/or competitive factors; (11) changes or events that impact the cryptocurrency industry, including potential regulation, that are outside of our control; (12) the risk that our business will not grow in line with our expectations or continue on its current trajectory; (13) the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of it, which could impact revenue and resources; (14) the risk that revenue or expense estimates may not be met or may be materially less or more than those anticipated; (15) the possibility that Galaxy Asset Management does not achieve its goals with respect to its strategies;

(16) the possibility that there is a disruption in bitcoin mining impacting our ability to achieve expected results and strategy,

(17) the failure to otherwise complete the anticipated transactions with respect to the Lease Agreement, (18) the risk that lending counterparties default and risk related to digital asset platforms where our assets are maintained; (19) price and trading volume volatility with respect to the ordinary shares of Galaxy Digital Holdings Ltd.; (20) regulatory concerns, technological challenges, cyber incidents or exploits on decentralized networks; (21) any impact on our operating results and financial condition due to market-wide liquidity problems and instability in the global banking system; (22) any impact to our operations from global conflict and effect on global economic markets; and (23) those other risks contained in the Annual Information Form ("AIF") for the year ended December 31, 2024 available on the Partnership's profile atwww.sedarplus.caand described in this MD&A.

Factors that could cause actual results of the Partnership to differ materially from those described in such forward-looking statements include, but are not limited to, a decline in the digital asset market or general economic conditions; the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of the stated addressable market; the failure or delay in the adoption of digital assets and the blockchain ecosystem; a delay or failure in developing infrastructure for our business or our businesses achieving mandates; delays or other challenges in the bitcoin mining business or the expansion into the AI/HPC data center business related to hosting, power, financing or construction, or our ability to capture potential adjacent opportunities ; any challenges faced in achieving asset management goals; any challenges faced with respect to decentralized networks or other digital asset platforms on which our assets are maintained; considerations with respect to liquidity and capital planning; the impact of new and ongoing global conflicts and their effect on global economic markets; and changes in applicable law or regulation and adverse legal and regulatory developments. Readers are cautioned that such risk factors, uncertainties and other factors are not exhaustive. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. The forward-looking statements in this MD&A are applicable only as of the date of this MD&A or as of the date specified in the relevant forward-looking statement. The Partnership does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward-looking statements.

Overview

The Partnership is a limited partnership formed under the laws of the Cayman Islands on May 11, 2018. Galaxy Digital Holdings GP LLC ("GDH GP" or the "General Partner") is a limited liability company incorporated under the laws of the Cayman Islands on July 26, 2018 and serves as the General Partner of the Partnership. Galaxy Group Investments LLC ("GGI"), a Delaware limited liability company owned by Michael Novogratz, is the sole member of GDH GP and continues to be the majority owner of the Partnership as of December 31, 2024. Galaxy Digital Holdings Ltd. ("GDH Ltd." or the "Company") has a minority investment in the Partnership and is listed on the Toronto Stock Exchange ("TSX") under the ticker "GLXY".

The Partnership is headquartered in New York City, with global offices across North America, Europe, and Asia.

As at December 31, 2024, the Partnership had 528 full-time employees.

The U.S. dollar is the presentation currency for all periods presented. There have been no changes to the accounting principles applied for all periods presented, except as disclosed in Critical Accounting Estimates and Accounting Policies including Initial Adoption, if applicable.

Limited Partnership Agreement

The key terms of the Limited Partnership Agreement (the "LPA") are consistent with those disclosed in the Partnership's audited financial statements for the year ended December 31, 2024.

The LPA allows the Partnership to make distributions, as and when determined by the General Partner, in its sole discretion so as to enable unit holders to pay anticipated taxes with respect to allocated Partnership taxable income and / or gains. Amounts distributed pursuant to the tax distribution provision are treated as an advance against, and reduce (on a dollar for dollar basis), future amounts that would otherwise be distributable to such limited partners. The LPA provides that the value of any tax distribution made shall not exceed 25% of the Partnership's market capitalization determined at the time the General Partner determines to make such distribution.

During the year ended December 31, 2024, the Partnership paid tax distributions of $55.3 million.

The foregoing summary is qualified in its entirety by the full text of the LPA which is available on GDH Ltd.'s SEDAR+ profile atwww.sedarplus.ca.

Description of Business

The Partnership manages and reports its activities in the following operating businesses: Global Markets, Asset Management and Digital Infrastructure Solutions.

• Galaxy Global Markets consists of Trading and Investment Banking.

• Galaxy Asset Management consists of exchange-traded fund ("ETF") and Alternative Investment strategies.

• Galaxy Digital Infrastructure Solutions consists of proprietary and hosted bitcoin mining services, the acquired GK8 technology and self-custody capabilities, and validator services.

Refer to Note 22 of the Partnership's consolidated financial statements for further information on reportable segments.

Global Markets

Galaxy Global Markets ("GGM") provides comprehensive financial products and services to a diversified client base, including institutions and Qualified Individuals1 within the digital asset ecosystem. GGM offers institutional-grade expertise and access to a broad range of digital asset products, including digital asset spot and derivatives trading, financing, capital markets and M&A advisory services.

GGM currently operates as two discrete businesses - Trading and Investment Banking.

The Partnership's Trading2 business provides services to 315 global active counterparties as of December 31, 2024 and provides liquidity on a principal basis across a variety of centralized and decentralized trading platforms, and over-the-counter ("OTC") markets globally. Through GGM, counterparties can access digital asset spot and derivative trading, bespoke lending, and structured products. GGM also engages in proprietary quantitative, arbitrage and macro trading strategies.

Our Investment Banking3 business offers expert financial and strategic advisory services for the digital assets, Web3 and blockchain technology sector. The team provides specialized crypto expertise while offering an expansive suite of financial services to public and private clients globally. In particular, Investment Banking helps clients execute transactions, including M&A transactions and divestitures, provides restructuring advisory services and offers equity and debt capital markets services, including project financing.

Asset Management

Galaxy Asset Management ("GAM")4 is a global asset management platform providing investors access to the digital asset ecosystem via a diverse suite of institutional-grade investment vehicles that span ETF and Alternative investment strategies.

GAM managed $5.7 billion5 in assets as of December 31, 2024, a 9% increase year-over-year and 22% increase quarter-over-quarter. $511.0 million of the $5.7 billion of assets under management ("AUM") represented engagements managed by GAM to unwind portfolios on behalf of the FTX estate. Excluding these opportunistic assets, GAM's AUM grew 66% year-over-year to $5.2 billion as of December 31, 2024, driven by $1.7 billion of gross inflows and $1.9 billion of net market appreciation, partially offset by $1.5 billion of gross outflows, and increased 22% quarter-over-quarter as of December 31, 2024, driven by

1 "Qualified Individuals" are Eligible Contract Participants (as defined by the Commodities Exchange Act in the U.S.), knowledgeable employees of the Partnership and accredited investors, who are usually high net worth individuals.

2 Trading operates primarily through Galaxy Digital LLC, its subsidiaries and certain other affiliates including Galaxy Derivatives LLC (which has submitted to the National Futures Association the forms necessary to register as a CFTC-regulated swap dealer).

3 Galaxy Investment Banking operates through Galaxy Digital Partners LLC, a FINRA registered broker-dealer, and Galaxy Digital Labs LLC.

4 Galaxy Asset Management includes Galaxy Digital Capital Management LP, a Securities & Exchange Commission ("SEC") registered investment adviser.

5 AUM data is unaudited. AUM is inclusive of sub-advised funds, committed capital closed-end vehicles, seed investments by affiliates, affiliated and unaffiliated separately managed accounts, and fund of fund products. Changes in AUM are generally the result of performance, contributions, withdrawals, liquidations, and opportunistic mandate wins. AUM for committed capital closed-end vehicles that have completed their investment period is reported as NAV plus unfunded commitments. AUM for closed-end vehicles is reported as of the most recent quarter available for the applicable period. AUM for affiliated separately managed accounts, the balance sheet venture investments, is reported as NAV as of the most recently available estimate for the applicable period.

$213.0 million of gross inflows and $1.2 billion of net market appreciation, partially offset by $435.0 million of gross outflows. The business is strategically focused on scaling its ETF and Alternative investment strategies, while leveraging a regional partnership model, with premiere local investment managers around the world, to expand our global product reach.

GAM's ETFs include a suite of passive and active products developed in partnership with leading asset managers across the U.S., Canada, Brazil and Europe. GAM's passive ETFs feature regulated, spot digital asset ETFs, while its active ETFs provide exposure to digital assets and other disruptive technologies. GAM's Alternative investment strategies encompass actively managed long-biased and long-short funds, and a venture franchise. GAM offers a Liquid Crypto Fund designed to provide access to both core and next generation digital assets and an Absolute Return Fund, launched in 2025, which employs a multi-asset strategy with long and short positions across the digital asset ecosystem and adjacent disruptive technologies. GAM's Venture franchise includes Galaxy Interactive, which invests at the intersection of content, technology and social commerce, with a focus on video games and the infrastructure powering immersive virtual worlds. Additionally, its inaugural crypto venture fund, which had an initial close of over $100 million in summer 2024, targets early-stage investments in crypto protocols, software infrastructure, and financialized applications. The venture franchise also features two global, multi-manager venture funds and a subset of Galaxy's balance sheet venture investments.

GAM utilizes third party Qualified Custodians, as defined by the U.S. Investment Advisers Act of 1940, for third party funds it manages to maintain and safeguard client assets, which are segregated from the assets of the custodians. Where possible, as a further risk mitigation tool, GAM employs a multi-custodial model for fund assets and requires insurance from our custody providers. GAM utilizes Big Four audit firms to audit our funds and utilizes independent, unaffiliated fund administrators for all our funds.

Digital Infrastructure Solutions

Galaxy Digital Infrastructure Solutions ("GDIS") focuses on developing, operating and investing in data center and digital asset infrastructure, including bitcoin mining, staking and self-custody technology.

GDIS includes our bitcoin mining operations, with a majority of our activity occurring at our flagship campus, Helios, in West Texas. As of December 31, 2024, GDIS' Hashrate Under Management ("HUM")6 was 6.1 exahash, with an average marginal cost to mine a bitcoin in 2024 of approximately $26,000 per coin. The Helios campus currently supports 200 megawatts ("MW") of capacity. In 2023, GDIS secured approvals to scale up to 800MW at Helios, and we expect additional approvals for a portion of an incremental 1.7 gigawatts currently under study in the first half of 2025.

As our bitcoin mining operations have expanded, so have the opportunities before us. There is growing demand for highly reliable power and data center infrastructure capacity to support accelerated artificial intelligence growth. To meet this increasing demand, subsequent to year end, Galaxy entered a 15-year lease agreement (the "Lease Agreement") with CoreWeave. As part of the agreement, Galaxy will deliver 133 MW of Critical IT Load to host CoreWeave's HPC infrastructure at our Helios data center campus in the panhandle region of West Texas. Over the 15-year term, Galaxy is contractually entitled to an estimated $4.5 billion of total revenue pursuant to the Lease Agreement.

In addition to mining and high-performance computing, the Partnership is also focused on emerging areas of blockchain infrastructure, including supporting the integrity of protocols and projects by operating validator nodes to secure blockchain networks, by supporting the development of emerging blockchain technologies and by offering self-custody technology solutions to institutional customers through GK8. Galaxy operates public mainnet infrastructure providing transaction validation services for the Ethereum, Solana, Celestia, Avalanche and SUI blockchain networks, among others, which allows holders of certain digital assets to participate in securing Proof of Stake ("PoS") networks and the consensus validation process, as well as earn staking rewards.

Galaxy's self-custody technology solution, comprising the assets of GK8 acquired in February 2023, licenses self-custody software technology that allows customers to generate and store the private keys to their digital assets, as well as to generate multi-signature backup keys in a secure cold storage vault.

Risks and Uncertainties

In addition to the risks contained herein, the disclosures in this MD&A are subject to, and should be read in conjunction with, the risk factors outlined in the AIF, filed on GDH Ltd.'s SEDAR+ profile atwww.sedarplus.ca.

6 Hashrate Under Management is defined as the total combined hashrate of active proprietary and hosted mining capacity managed by Galaxy.

Annual Highlights & Results

The following represents selected financial data and a discussion of significant changes.

As of

(in millions)

December 31, 2024 December 31, 2023 December 31, 2022

Digital assets

Digital assets posted as collateral

Total

Investments Loans receivable(1) Property and equipment Total assets

Total liabilities Total equity

(1) Includes digital asset and fiat loans.

2,964.2 $

1,119.9 $

566.7

277.1

316.1

25.1

3,241.3

1,436.0

591.8

1,643.5

735.1

595.1

1,056.2

491.9

213.6

267.6

260.0

208.5

7,187.5

3,675.2

2,346.1

4,910.4

1,885.5

907.4

2,277.0

1,789.8

1,438.8

Year ended

(in millions)

December 31, 2024 December 31, 2023 December 31, 2022

Fee revenue

103.2 $

51.3 $ 35.6

(171.1)

13.4 42.0

Net realized gain (loss) on digital assets Net realized gain (loss) on investments Lending and staking revenue

615.7

311.8 55.1

274.3

52.2 36.8

267.8

151.6 191.5

Net derivative gain (loss) Total income

1,154.6

613.9 419.5

Operating expenses

(948.8)

(376.4) (496.9)

429.9

84.4 (496.2)

Net unrealized gain (loss) on digital assets Net unrealized gain (loss) on investments Comprehensive income (loss) for the period

(255.4)

2.0 (659.2)

366.5

296.0

(1,023.3)

• As of December 31, 2024, digital assets, including digital assets posted as collateral, was $3.2 billion, an increase of $1.8 billion from December 31, 2023. This increase was primarily due to increases in digital assets borrowed of $1.1 billion and digital assets collateral payable of $754.7 million, as well as an increase in fair value of the underlying digital assets. The Partnership's largest digital asset holding as of both December 31, 2024 and December 31, 2023 was BTC. Over the same period, the price of BTC increased 121.1%.

• Investments increased $908.4 million during the year to $1.6 billion as of December 31, 2024. The change was primarily due to new investments in bitcoin spot ETFs valued at $659.5 million as of December 31, 2024, and the $151.3 million investment in the Partnership's sponsored Galaxy Digital Crypto Vol Fund LLC, which acquired Solana from the FTX estate at the end of March 2024 and additional restricted digital assets in the second, third and fourth quarters of 2024. Bitcoin ETFs ("BTC ETFs") were approved by the SEC and launched in January 2024. Unlike BTC, BTC ETFs can be utilized as a marginable security by traditional brokers and exchanges outside of the crypto industry.

• Total liabilities increased by $3.0 billion during the period to $4.9 billion as of December 31, 2024 primarily due to increases in digital assets loans payable of $1.1 billion, collateral payable of $818.3 million, loans payable of $417.6 million and notes payables of $437.1 million. Increases in digital assets loans payable and collateral payable were driven by increases in borrowing and lending activities, as well as an increase in the fair value of the underlying digital assets. Increases in loans payable were driven by the overall increase in business activity during the year. Loans payable increased without an equivalent increase in assets posted as collateral given improved market conditions and Galaxy's standing in the industry; starting at the end of the first quarter of 2024, the Partnership was in a position to borrow digital assets without posting collateral. Notes payable increased as a result of Galaxy's issuance of $402.5

million, aggregate principal amount, of 2.500% exchangeable senior notes in November 2024 that will mature in 2029, unless earlier exchanged, redeemed, or repurchased.

• Total equity increased by $487.3 million during the period to $2.3 billion as of December 31, 2024 primarily driven by $366.5 million of comprehensive income as well as proceeds from the issuance of ordinary shares in an underwritten block trade of $119.5 million, net of transaction costs, in April 2024.

• Operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increases in general and administrative expenses, blockchain reward distributions, interest expense, and compensation and compensation related expenses recognized in 2024. The increase in general and administrative expense was driven by a legal settlement, a reversal of impairment on mining equipment recognized in 2023, higher depreciation of mining equipment and infrastructure, and incremental power purchase costs, as well as higher trading, commission and custody expenses in 2024.

• Commencing in the second quarter of 2024, blockchain reward distributions have contributed meaningfully to operating expenses. The Partnership operates PoS validation infrastructure which allows third-parties to stake their digital assets on its validator nodes. The Galaxy non-consolidated sponsored fund Galaxy Digital Crypto Vol Fund (the "CPO") acquired restricted Solana with a value in excess of a billion dollars from the FTX bankruptcy estate at the end of March 2024 and additional restricted digital assets in the second, third and fourth quarters of 2024. The restricted digital assets managed by the CPO were bonded to Galaxy operated validators. Ether from the Lido platform were also bonded to Galaxy operated validators as a result of Galaxy's acquisition of Cryptomanufaktur LLC ("CMF") in July 2024. Staking for customers is recognized on a gross basis in staking revenue with the corresponding expense in blockchain reward distributions. The net portion of staking rewards retained by Galaxy earned on third party digital assets bonded to Galaxy validator nodes, including the CPO, is between 4% and 10%. Operating expenses also increased due to incremental interest expense. Refer to the Expenses section for detail on drivers of each operating expense.

The U.S. dollar is the presentation currency and functional currency of the Partnership's major operating subsidiaries for all periods presented above. There have been no changes to the accounting principles applied for all periods presented, except as disclosed in Critical Accounting Estimates and Accounting Policies.

The following table represents the Partnership's breakdown of comprehensive income (loss) for the past eight quarters:

December September

(in millions)

31, 2024

30, 2024

June 30, 2024

March 31,

December

September

June 30,

March 31,

2024

31, 2023

30, 2023

2023

Net realized gain (loss) on digital assets

$ 560.6 $

(53.6) $

(161.7) $

270.4 $

Net realized gain (loss) on investments

$ (85.0) $

Net derivative gain Income (loss)

$ 62.5 $

$ 698.1 $

73.8 $ 16.3 $ 143.0 $

12.8 $ 105.3 $

53.7 $

Operating expenses

(440.3)

(186.2)

$ (172.9)

Net unrealized gain (loss) on digital assets

$ $

(439.4)

$ $

44.3

$ 42.9

$ $

Net unrealized gain (loss) on investments

368.9

(60.5)

(114.3)

Comprehensive income (loss)

$ $

174.5

$ $

(53.8)

$ $

(175.3)

$ $

293.1 $

(67.6) $

20.2 $

66.1

(172.8) $

(55.3)

22.4

48.3

(2.0)

83.6 $

71.2

15.7

9.6

55.1

259.7 $

355.5

3.0

108.7

146.7

(149.4) $

(99.0)

(101.1)

(85.2)

(91.1)

(22.5)

26.2

(4.8)

3.0

93.0

(25.4)

(65.9)

82.7

301.5

(93.3)

(46.0)

133.8

96.8 $

235.9 $ 421.0 $

For the year ended December 31, 2024, comprehensive income was $366.5 million, as compared to $296.0 million for the year ended December 31, 2023. The income for the year ended December 31, 2024 was driven primarily by net realized gain on digital assets of $615.7 million, net unrealized gain on investments of $429.9 million, lending and staking revenue of $274.3 million, and net derivative gain of $267.8 million; offset by operating expenses of $948.8 million, net unrealized loss on digital assets of $255.4 million, and net realized loss on investments of $171.1 million. Fee revenue of $103.2 million and revenue from proprietary mining operations of $63.3 million also made meaningful contributions to comprehensive income. As one of the primary observable benchmarks for valuation in the space, price movement for digital assets was positive during the year. Bitcoin increased by 121.1%, from approximately $42,265 to $93,429 per coin and ether increased by 46%, from approximately $2,281 to $3,333 per coin during the year. The comprehensive income of $296.0 million for the year ended December 31, 2023 was primarily due to net realized gain on digital assets of $311.8 million, net derivative gain of $151.6 million and net unrealized gain on investments of $84.4 million; offset by operating expenses of $376.4 million, primarily compensation related expenses of $210.7 million. Lending and staking revenue of $52.2 million, fee revenue of $51.3 million, revenue from proprietary mining of $33.1 million, and net unrealized gains on digital assets of $2.0 million also made meaningful contribution to comprehensive income.

Financial Outlook

Disclaimers and Additional Information

This section below contains certain pre-released first quarter 2025 financial information (the "pre-released financial information"). The pre-released financial information contained in this MD&A is preliminary and represents the most current information available to management. The Partnership's actual consolidated financial statements for such period may result in material changes to the pre-released financial information summarized in this MD&A (including by any one financial metric, or all of the financial metrics) as a result of the completion of normal quarter end accounting procedures and adjustments or due to other risks contained in the Annual Information Form for the year ended December 31, 2024. Although the Partnership believes the expectations reflected in this MD&A are based upon reasonable assumptions, the Partnership can give no assurance that actual results will not differ materially from these expectations.

Preliminary Quarter-to-Date Financial Highlights, through Thursday, March 27, 20257

• Net loss before tax is estimated to be between $275 million and $325 million, through March 27, 2025. During the same period, total equity declined to a range between $1.9 billion and $2.0 billion. March 2025 quarter-to-date results were primarily driven by the depreciation of digital asset prices.

7 This preliminary, unaudited quarter-to-date financial information is as of March 27, 2025. Financial results include impacts of non-cash equity based compensation but exclude completion of the full quarterly valuation process of our investment portfolio. This data is subject to change as management completes its quarterly close procedures.

Discussion of Operations & Operational Highlights

• Helios

Subsequent to year end, further to the term sheet announced in November 2024, Galaxy entered into the Lease Agreement with CoreWeave, one of the world's leading providers of artificial intelligence and next-generation cloud services. As part of this agreement, Galaxy will deliver 133 MW of Critical IT Load to host CoreWeave's AI infrastructure and HPC services.

• Capital Raise and Debt Issuance

In April 2024, GDH Ltd. raised C$169.4 million from a syndicate of underwriters (the "Equity Raise"), led by Canaccord Genuity Corp. GDH Ltd. issued 12,100,000 ordinary shares pursuant to the Equity Raise. Galaxy is utilizing the net proceeds as intended for working capital and general corporate purposes. An equivalent number of Class A Units of GDH LP were issued to GDH Ltd.

In November 2024, Galaxy issued $402.5 million, aggregate principal amount, of 2.500% exchangeable senior notes (the "2029 Exchangeable Notes"). The 2029 Exchangeable Notes will mature in 2029, unless earlier exchanged, redeemed, or repurchased. Interest on the 2029 Exchangeable Notes is payable semi-annually. The 2029 Exchangeable Notes had an initial exchange rate of 10,497.5856 ordinary shares of GDH Ltd. per US$250,000 principal amount.

• Acquisitions

On July 18, 2024, the Partnership acquired the assets of CMF for approximately $12.4 million of cash and equity, inclusive of contingent consideration of approximately $5.5 million payable by the Partnership if CMF achieves certain financial and operating targets by the end of 2026. CMF provides staking infrastructure, primarily on the Ethereum blockchain, as well as data oracle services. 359,919 ordinary shares were issued as initial consideration in connection with this acquisition. Subsequent to year end an additional 76,573 ordinary shares were issued for milestone consideration. An equivalent number of Class A Units of the Partnership were issued to the Company.

On December 9, 2024, the Partnership acquired all the shares of Fierce Technology, Inc. ("Fierce") for $12.5 million of cash and equity. Fierce provides financial application software to enable users' trading and banking services. 427,723 ordinary shares were issued in connection with this acquisition. An equivalent number of Class A Units of the Partnership were issued to the Company.

• GDH Ltd. Reorganization and Domestication

On May 5, 2021, Galaxy announced that its board of directors approved a proposed reorganization and domestication (the "Reorganization") of GDH Ltd. and the Partnership. Under the proposed terms of the Reorganization: GDH Ltd. and the Partnership will change their jurisdiction of incorporation from the Cayman Islands to the state of Delaware. Galaxy's corporate and capital structure will be reorganized so as to normalize it on the basis of frequently used Up-C structures in the U.S. The Reorganization is subject to ongoing SEC review and stock exchange approval and will include the following steps:

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Galaxy Digital Inc. ("PubCo"), a new Delaware holding company, has been established and will become the successor public company of GDH Ltd., with all outstanding Galaxy ordinary shares becoming Class A shares of PubCo.

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Michael Novogratz, the Chief Executive Officer (the "CEO") and founder of Galaxy, who currently controls the General Partner of the Partnership, will transfer control of the Partnership's General Partner to PubCo.

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PubCo will issue new voting securities to the CEO and other holders of Class B Units of the Partnership that will entitle them to vote (but not hold any economic rights) at the PubCo level, as though they had converted their existing Class B Units of the Partnership for shares of PubCo.

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The "variable voting rights" attached to the ordinary shares of Galaxy that currently restrict the aggregate votes that may be cast by U.S. shareholders will be eliminated.

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PubCo intends to apply to list its Class A common stock on Nasdaq under the symbol "GLXY."

Disclaimer

Galaxy Digital Holdings Ltd. published this content on April 04, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 04, 2025 at 09:51 UTC.