Galaxy Digital Inc.GLXY
Galaxy Digital Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
Items measured on a recurring basis at fair value:
As of December 31, 2025 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Digital financial assets | $ | 694,991 | $ | 293,630 | $ | — | $ | 988,621 | ||||||||||||||||||
Digital intangible assets at fair value | 2,636,173 | 108,021 | — | 2,744,194 | ||||||||||||||||||||||
Digital asset loans receivable, net of allowance — Financial assets | — | 374,308 | — | 374,308 | ||||||||||||||||||||||
Digital assets receivable | 43 | 8,454 | 8,497 | |||||||||||||||||||||||
Derivative assets | 69,548 | 14,259 | — | 83,807 | ||||||||||||||||||||||
Embedded derivative — Collateral payable — Digital assets | — | 358,743 | — | 358,743 | ||||||||||||||||||||||
Embedded derivative — Digital assets borrowed | — | 321,651 | — | 321,651 | ||||||||||||||||||||||
Embedded derivative — Payable to customer | — | 854 | — | 854 | ||||||||||||||||||||||
Investments (1) | 761,408 | 29,313 | 495,372 | 1,286,093 | ||||||||||||||||||||||
$ | 4,162,120 | $ | 1,500,822 | $ | 503,826 | $ | 6,166,768 | |||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Investments sold short (2) | $ | 59,893 | $ | — | $ | — | $ | 59,893 | ||||||||||||||||||
Derivative liabilities | 32,486 | 7,996 | — | 40,482 | ||||||||||||||||||||||
Embedded derivative — Digital assets borrowed | — | 10,000 | — | 10,000 | ||||||||||||||||||||||
Embedded derivative — Collateral payable | — | 36,057 | — | 36,057 | ||||||||||||||||||||||
$ | 92,379 | $ | 54,053 | $ | — | $ | 146,432 | |||||||||||||||||||
__________________
(1)Excludes equity securities measured utilizing net asset value as a practical expedient of $287.0 million and investments utilizing the measurement alternative of $159.2 million as they are without readily determinable fair values.
(2)Investments sold short are included in Other current liabilities in the Company’s consolidated statements of financial position.
As of December 31, 2024 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Digital financial assets | $ | 354,851 | $ | 4,814 | $ | — | $ | 359,665 | ||||||||||||||||||
Digital intangible assets at fair value | 1,929,661 | 68,239 | 20,457 | 2,018,357 | ||||||||||||||||||||||
Digital asset loans receivable, net of allowance — Financial assets | — | 393,734 | — | 393,734 | ||||||||||||||||||||||
Digital assets receivable | 204 | 24 | 60,492 | 60,720 | ||||||||||||||||||||||
Assets posted as collateral — Digital assets | — | 278,527 | — | 278,527 | ||||||||||||||||||||||
Derivative assets | 188,836 | 18,817 | 207,653 | |||||||||||||||||||||||
Embedded derivative — Collateral payable | — | 55,848 | — | 55,848 | ||||||||||||||||||||||
Embedded derivative — Digital assets borrowed | — | 24,039 | — | 24,039 | ||||||||||||||||||||||
Investments (1) | 751,220 | — | 524,573 | 1,275,793 | ||||||||||||||||||||||
$ | 3,224,772 | $ | 844,042 | $ | 605,522 | $ | 4,674,336 | |||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Investments sold short (2) | $ | 6,524 | $ | — | $ | — | $ | 6,524 | ||||||||||||||||||
Derivative liabilities | 58,155 | 107,703 | — | 165,858 | ||||||||||||||||||||||
Embedded derivative — Digital assets borrowed | — | 252,635 | — | 252,635 | ||||||||||||||||||||||
Embedded derivative — Collateral payable | — | 161,261 | — | 161,261 | ||||||||||||||||||||||
Embedded derivative — Notes payable | — | — | 136,192 | 136,192 | ||||||||||||||||||||||
$ | 64,679 | $ | 521,599 | $ | 136,192 | $ | 722,470 | |||||||||||||||||||
__________________
(1)Excludes equity securities measured utilizing net asset value as a practical expedient of $304.5 million and equity securities utilizing the measurement alternative of $63.2 million as they are without readily determinable fair values.
(2)Investments sold short are included in Other current liabilities in the Company’s consolidated statements of financial position
Nonrecurring Fair Value Measurements
Impairment losses are recognized for Digital intangible assets carried at the lower of cost or impaired value and Property and equipment, net when their carrying amounts exceed fair value. See Note 14 for additional information on impairment of Property and equipment. The carrying values for Digital intangible assets carried at the lower of cost or impaired value were $808.8 million and $550.2 million as of December 31, 2025 and 2024, respectively. The Company categorized the fair value measurements for Property and equipment, net as Level 3.
The following table summarize changes in assets and liabilities measured and reported at fair value for which Level 3 inputs have been used to determine fair value for the periods ended December 31, 2025 and 2024, respectively.
(in thousands) Assets | Fair value, Beginning Balance | Purchases | Sales /Distributions | Net Realized Gain / (Loss) | Net Unrealized Gain / (Loss) | Transfers in /(out) of Level 3 | Fair value, Ending Balance | |||||||||||||||||||||||||||||||||||||
Digital intangible assets | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2025 | $ | 20,457 | $ | — | $ | — | $ | — | $ | — | $ | (20,457) | $ | — | ||||||||||||||||||||||||||||||
December 31, 2024 | $ | 68,004 | $ | — | $ | — | $ | — | $ | (17,043) | $ | (30,504) | $ | 20,457 | ||||||||||||||||||||||||||||||
Digital assets receivable | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2025 | $ | 60,492 | $ | 2,250 | $ | — | $ | — | $ | (3,724) | $ | (50,564) | $ | 8,454 | ||||||||||||||||||||||||||||||
December 31, 2024 | $ | 20,569 | $ | — | $ | (4,727) | $ | 4,724 | $ | 52,477 | $ | (12,551) | $ | 60,492 | ||||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2025 | $ | 524,573 | $ | 500,456 | $ | (354,924) | $ | 169,999 | $ | (91,976) | $ | (252,756) | $ | 495,372 | ||||||||||||||||||||||||||||||
December 31, 2024 | $ | 364,576 | $ | 129,188 | $ | (221,564) | $ | 117,036 | $ | 119,803 | $ | 15,534 | $ | 524,573 | ||||||||||||||||||||||||||||||
Embedded derivative — Notes payable | ||||||||||||||||||||||||||||||||||||||||||||
December 31, 2025 | $ | 136,192 | $ | — | $ | — | $ | — | $ | — | $ | (136,192) | $ | — | ||||||||||||||||||||||||||||||
December 31, 2024 | $ | 10,472 | $ | 93,993 | $ | — | $ | — | $ | 31,727 | $ | — | $ | 136,192 | ||||||||||||||||||||||||||||||
Transfers in and out of Level 3 are considered to have occurred at the beginning of the period the transfer occurred. For the period ended December 31, 2025, gross transfers into Level 3 were $13.1 million and gross transfers out of Level 3 were $473.1 million. The transfers into Level 3 for Investments were due to fair value adjustments determined by unobservable market inputs. The transfers into Level 3 for Digital assets receivable were due to underlying token launches of contracts held. The transfers out of Level 3 for Investments were due to conversion of warrants and preferred stock into publicly traded common stock. Transfers out of Level 3 for Digital assets receivable and Digital assets were due to removal of restrictions. Transfers out of Level 3 for Embedded derivative — Notes payable was due to the Reorganization Transactions. See Note 18 for additional information. For the year ended December 31, 2024, gross transfers into Level 3 were $21.2 million and gross transfers out of Level 3 were $48.7 million. The transfers into Level 3 for Investments were due to fair value adjustments determined by unobservable market inputs. The transfers into Level 3 for Digital assets receivable were due to underlying token launches of contracts held. Transfers out of Level 3 for Investments related to a conversion of a convertible note upon emergence from a bankruptcy during the year. Transfers out of Level 3 for Digital assets receivable and Digital assets were due to the removal of restrictions.
The following table presents additional information about valuation methodologies and significant unobservable inputs used for assets and liabilities that are measured and reported at fair value and categorized within Level 3 as of December 31, 2025 and 2024, respectively:
Financial Instrument | Fair Value at December 31, 2025 (in thousands) | Significant Unobservable Inputs | Range | Weighted Average | ||||||||||||||||||||||
Digital assets receivable | $ | 8,454 | Marketability discount | 3.3% - 72.3% | 49.3% | |||||||||||||||||||||
Investments | $ | 495,372 | Time to liquidity event (years) | 0.0 - 10.0 | 4.8 | |||||||||||||||||||||
Annualized equity volatility | 60.0% - 90.0% | 81.7% | ||||||||||||||||||||||||
Risk free rate | 3.5% - 4.2% | 3.8% | ||||||||||||||||||||||||
Market adjustment discount | 25.0% - 90.0% | 46.9% | ||||||||||||||||||||||||
Market adjustment premium | 50.0% - 180.0% | 102.9% | ||||||||||||||||||||||||
Marketability discount | 13.8% - 35.0% | 23.8% | ||||||||||||||||||||||||
Expected dividend payout ratio | —% | —% | ||||||||||||||||||||||||
Enterprise value to LTM revenue multiple | 2.5x - 3.3x | 3.1x | ||||||||||||||||||||||||
Enterprise value to projected revenue multiple | 3.0x - 5.0x | 4.4x | ||||||||||||||||||||||||
Enterprise value to annualized revenue | 5.0x - 9.0x | 7x | ||||||||||||||||||||||||
Enterprise value to ARR | 3.0x - 13.00x | 12.0x | ||||||||||||||||||||||||
EV to gross profit | 6.0x | 6.0x | ||||||||||||||||||||||||
Recovery percentage | 36.0% | 36.0% | ||||||||||||||||||||||||
Financial Instrument | Fair Value at December 31, 2024 (in thousands) | Significant Unobservable Inputs | Range | Weighted Average | ||||||||||||||||||||||
Digital intangible assets | $ | 20,457 | Marketability discount | 15.9% - 45.2% | 32.1% | |||||||||||||||||||||
Digital assets receivable | $ | 60,492 | Marketability discount | 5.5% - 72.8% | 35.8% | |||||||||||||||||||||
Investments | $ | 524,573 | Time to liquidity event (years) | 1.0 - 5.0 | 4.1 | |||||||||||||||||||||
| Annualized equity volatility | 70.0% - 90.0% | 88.8% | ||||||||||||||||||||||||
| Risk free rate | 3.4% - 4.4% | 4.2% | ||||||||||||||||||||||||
| Market adjustment discount | 30.0% - 90.0% | 41.0% | ||||||||||||||||||||||||
| Market adjustment premium | 25.0% - 130.0% | 79.6% | ||||||||||||||||||||||||
| Marketability discount | 3.5% - 51.8% | 26.0% | ||||||||||||||||||||||||
| Expected dividend payout ratio | —% | —% | ||||||||||||||||||||||||
| Enterprise value to LTM revenue multiple | 2.5x - 16.8x | 10.8x | ||||||||||||||||||||||||
| Enterprise value to projected revenue multiple | 2.0x - 10.5x | 7.0x | ||||||||||||||||||||||||
| Enterprise value to annualized revenue | 3.5x - 9.0x | 6.7x | ||||||||||||||||||||||||
| Enterprise value to LTM volume | 3.0x | 3.0x | ||||||||||||||||||||||||
| Enterprise Value to ARR | 8.5x - 15.8x | 10.9x | ||||||||||||||||||||||||
| Price to tangible book value | 1.5x | 1.5x | ||||||||||||||||||||||||
| Enterprise value to projected EBITDA | 9.0x - 14.0x | 11.5x | ||||||||||||||||||||||||
| Scenario probability | 35.0% | 35.0% | ||||||||||||||||||||||||
| Recovery percentage | 35.0% - 61.6% | 51.5% | ||||||||||||||||||||||||
Embedded derivative — Notes payable | $ | 136,192 | Volatility | 45.6% - 75.0% | 55.4% | |||||||||||||||||||||
| Risk free rate | 4.2% - 4.4% | 4.3% | ||||||||||||||||||||||||
| Time-step (years) | 0.004 | 0.004 | ||||||||||||||||||||||||
Increases and/or decreases in the various unobservable inputs used to determine the Level 3 valuations could result in significantly higher or lower fair value measurements.
Financial Instruments Not Measured at Fair Value
The following table presents the fair value of financial instruments not measured at fair value in the Company’s consolidated statements of financial position. This table excludes non-financial assets and liabilities.
As of December 31, 2025 | ||||||||||||||||||||||||||||||||
(in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,246,240 | $ | 1,246,240 | $ | 1,246,240 | $ | — | $ | — | ||||||||||||||||||||||
Assets posted as collateral – Cash | 700 | 700 | — | 700 | — | |||||||||||||||||||||||||||
Accounts receivable | 34,012 | 34,012 | — | 34,012 | — | |||||||||||||||||||||||||||
Loans receivable | 557,002 | 557,002 | — | 557,002 | — | |||||||||||||||||||||||||||
Total Assets | $ | 1,837,954 | $ | 1,837,954 | $ | 1,246,240 | $ | 591,714 | $ | — | ||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 277,663 | $ | 277,663 | $ | — | $ | 277,663 | $ | — | ||||||||||||||||||||||
Notes payable | 2,861,055 | 2,864,110 | — | 1,986,123 | $ | 877,987 | ||||||||||||||||||||||||||
Collateral payable — Cash | 19,266 | 19,266 | — | 19,266 | — | |||||||||||||||||||||||||||
Payable to customers — Cash | 2,359 | 2,359 | — | 2,359 | — | |||||||||||||||||||||||||||
Loans payable | 52,626 | 52,626 | — | 52,626 | — | |||||||||||||||||||||||||||
Settlement liability | 151,034 | 148,775 | — | 148,775 | — | |||||||||||||||||||||||||||
Total Liabilities | $ | 3,364,003 | $ | 3,364,799 | $ | — | $ | 2,486,812 | $ | 877,987 | ||||||||||||||||||||||
As of December 31, 2024 | ||||||||||||||||||||||||||||||||
(in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
Cash and cash equivalents | $ | 462,103 | $ | 462,103 | $ | 462,103 | $ | — | $ | — | ||||||||||||||||||||||
Assets posted as collateral – Cash | — | — | — | — | — | |||||||||||||||||||||||||||
Accounts receivable | 55,279 | 55,279 | 55,279 | — | — | |||||||||||||||||||||||||||
Loans receivable | 476,620 | 476,620 | — | 476,620 | — | |||||||||||||||||||||||||||
Total Assets | $ | 994,002 | $ | 994,002 | $ | 517,382 | $ | 476,620 | $ | — | ||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 281,531 | $ | 281,531 | $ | 281,531 | $ | — | $ | — | ||||||||||||||||||||||
Notes payable | 845,186 | 836,402 | — | 836,402 | — | |||||||||||||||||||||||||||
Collateral payable — Cash | 74,995 | 74,995 | — | 74,995 | — | |||||||||||||||||||||||||||
Payable to customers — Cash | 19,520 | 19,520 | — | 19,520 | — | |||||||||||||||||||||||||||
Loans payable | 510,718 | 510,718 | — | 510,718 | — | |||||||||||||||||||||||||||
Settlement liability | 149,445 | 151,029 | — | 151,029 | — | |||||||||||||||||||||||||||
Total Liabilities | $ | 1,881,395 | $ | 1,874,195 | $ | 281,531 | $ | 1,592,664 | $ | — | ||||||||||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.