Of Bitcoin’s future and the role of ‘boomer wealth’

• Galaxy Digital’s net income hit $296M in the 2023 financial year. 
• Huge boomer wealth could drive a great BTC demand-supply imbalance. 

Galaxy Digital CEO and founder Mike Novogratz has tipped “boomer wealth” participation as a big catalyst for the next leg of Bitcoin [BTC] and crypto market rally. 

During a 2023 results conference call on the 26th of March, Novogratz termed the impressive 2023 results “more fun” amidst a crypto bull market. 

“Listen, it’s a lot more fun to get on these earnings calls after a good quarter and in the middle of a great crypto bull market. Last time we spoke was mid-November; Bitcoin was $35,000 today at $70K. And so a lot’s going on in the markets and here at Galaxy.”

For perspective, Galaxy posted a $296M in net income for 2023. This is contrary to a loss of $1B recorded in crypto winter in 2022.

Additionally, its AUM (assets under management) steadily surged to $5B in Q4 2023. Thanks to the US spot BTC ETF frenzy, the AUM has since doubled to $10B by February 2024. 

Will boomer wealth tip extra crypto rally?

Despite the strong 2023 performance, Galaxy’s chief sees more potential, partly driven by macro factors and boomers rushing to jump into the rally.

On the macro front, Novogratz cited national debt woes as a catalyst for Bitcoin adoption. He stated; 

“And in 100 days, it (US debt) will be $35 trillion, and in 200 days, it will be $36 trillion, and until the United States and other countries get their fiscal house in order, get their finances in order, the story for Bitcoin and other digital assets is going to continue to grow.”

Additionally, the Galaxy’s chief highlighted the potential impact of huge boomer wealth, noting,

“With the ETF, we have opened up the $80 trillion baby boomer giant bulk of wealth here in the United States, right? $40 trillion of that is managed by RIAs. Broadly, they have not participated in the Bitcoin rally until now. And so as people go from 0% allocation, to 2%, 3% allocations, you’re seeing more demand than supply.” 

Galaxy Digital partnered with Invesco to offer clients BTC exposure through the Invesco Galaxy Bitcoin ETF (BTCO). According to Bitmex Research data, the fund boasts 5.4K Bitcoin at the time of writing. 

In the meantime, BTC has been whip-sawing around $70K after an impressive range breakout on Monday (March 25).

It will be interesting to see how prices play out beyond post-halving and its overall impact on Galaxy margins.