Galaxy Digital uplisting What does it mean?
Expanding Galaxy Digital’s Reach: Why a NASDAQ Listing Could Unleash a Liquidity Tsunami Introduction Galaxy Digital Holdings Ltd.
TLDR: Galaxy Digital’s potential has been constrained by its exclusive TSX listing, but a NASDAQ uplisting would unlock a new era of opportunity. From liquidity enhancements and massive global exposure to higher analyst coverage and reduced price volatility, this move could catalyze a total repricing of GLXY, driving its value skyward and redefining its appeal among both institutional and retail investors. As Galaxy Digital prepares for this monumental leap, the countdown to NASDAQ has begun—investors would do well to take notice
(TSX: ( GLXY), Galaxy Digital, famously dubbed the "Goldman Sachs of Crypto," and sometimes likened to a "crypto Berkshire Hathaway", has secured a leading position in the digital asset and blockchain landscape. Yet, its current TSX listing might keep the company’s potential contained. This paper dives into how a NASDAQ uplisting could shatter liquidity barriers, enabling a massive price appreciation driven by broader market visibility and fresh waves of investor interest. Unlocking New Liquidity Heights with a NASDAQ Uplisting Currently, GLXY’s TSX listing restricts access to a broader pool of funds and retail investors, limiting its potential reach. A NASDAQ listing, however, flings open the gates to high-frequency trading (HFT), a massive global investor base, and a tech-focused market—elements that supercharge liquidity, attract more active engagement, and narrow bid-ask spreads.
Massive Market Activity: The NASDAQ boasts almost double the daily trading volume of the TSX, promising GLXY a leap in liquidity and investment interest.
Tech Synergy: The NASDAQ’s concentration on technology stocks perfectly complements Galaxy’s business model, offering a more precise fit than the resource-heavy TSX.
Increased HFT Activity: HFT drives liquidity by narrowing bid-ask spreads and improving price discovery. On the NASDAQ, where HFT accounts for over half of trading volume, GLXY could experience smoother and more competitive pricing dynamics.
Cross-Market Arbitrage Opportunities: A U.S. counterpart listing unlocks lucrative arbitrage potential, encouraging traders to actively engage with GLXY across borders, amplifying its liquidity and reducing price disparities. NASDAQ’s Magnetic Pull on Worldwide Investors. Unlike the TSX, which primarily caters to Canadian investors, a NASDAQ listing unlocks GLXY’s potential across a vast, global network of retail and institutional investors. As CEO Novogratz put it, NASDAQ brings access to the “liquidity of the world.” Now, imagine the impact as Galaxy reaches investors not only in North America but across Europe, Latin America, and Asia Pacific—think Brazil, India, Japan, and beyond. This shift would open the door to a broader range of U.S. investors, including mutual funds, hedge funds, and major institutions currently unable to invest under the TSX. This global reach could be a game-changer, driving demand from every corner of the investment landscape. The Repricing Phenomenon: Anticipating a Price Surge With the NASDAQ uplisting under SEC review, investors and analysts are already speculating on GLXY’s post-listing trajectory. The NASDAQ’s higher trading volumes and liquidity dynamics could catalyze substantial repricing.
Cross-Border Price Dynamics: Studies show that U.S. markets often lead in setting prices for cross-listed stocks. The NASDAQ’s proactive price adjustments could introduce a new level of valuation accuracy for GLXY, aligning it with investor sentiment in the dynamic U.S. market.
Substantial Price Appreciation: Increased exposure and liquidity could fuel significant upward pressure on GLXY’s stock, magnifying its valuation potential.
Scarcity Value Effect: With only 27% of shares available in the public float, this restricted supply could intensify competition for GLXY shares as demand spikes—propelling the stock even higher. November 09, 2024 1 2 November 09, 2024 Elevated Investor Confidence and Analyst Coverage A NASDAQ listing is a badge of legitimacy that often reduces the country-specific risk discount some investors apply to foreign stocks. Additionally, it tends to attract broader analyst coverage, enhancing the stock’s visibility and ensuring that market-moving news is thoroughly examined and disseminated—another crucial factor that could drive price appreciation. Comparative Liquidity Metrics GLXY’s liquidity on the TSX pales compared to NASDAQ peers. . Currently, only about 1.00% of its float trades on average, which restricts price discovery. A NASDAQ uplisting could potentially increase this to 1530% of the float, marking a 30x surge in trading activity and unlocking powerful liquidity dynamics for price discovery.
High Price Sensitivity (FFPIR Ratio) [9]: The FreeFloat Price Impact Ratio (FFPIR) ratio measures the trading volume, adjusted for free float, required to produce a 1% change in a stock’s price. A higher ratio suggests greater liquidity, indicating that the stock is less sensitive to price changes relative to trading volumes. GLXY’s FFPIR ratio is 0.426, requiring only 0.42% of its free float traded to move its price by 1%, showing lower liquidity. In contrast, MARA’s higher ratio of 11 indicates meaningfully greater liquidity, as it takes significantly more volume to impact its price.  Experiencing Reduced Price Sensitivity: Increased liquidity would raise the FFPIR ratio, making the stock less sensitive to trading volumes and more attractive to institutional investors who require the ability to trade large positions without significantly impacting the stock price.
Hypothetical Price Sensitivity: We can estimate the potential price impact in a scenario where 25% of the free float is traded. For GLXY, this surge in trading volume could drive a projected price increase of 60%, which illustrates the relationship between liquidity and price sensitivity under current conditions. However, this figure is conservative and reflects just one point in time; at peak illiquidity, price sensitivity was nearly double, suggesting potential appreciation could reach 120%. Realistically, such volume may only materialize post-uplist, when improved liquidity and demand from new investors could amplify this effect even further.
Conclusion Galaxy Digital’s potential has been constrained by its exclusive TSX listing, but a NASDAQ uplisting would unlock a new era of opportunity. From liquidity enhancements and massive global exposure to higher analyst coverage and reduced price volatility, this move could catalyze a total repricing of GLXY, driving its value skyward and redefining its appeal among both institutional and retail investors. As Galaxy Digital prepares for this monumental leap, the countdown to NASDAQ has begun—investors would do well to take notice.
Disclaimer:
The information in this material is for general information only and is those of the author, not a recommendation or solicitation to buy or sell investment products. This material was developed and produced by James Sullivan, who is not affiliated with the named broker-dealer. Always consult a tax or legal advisor to review your situation comprehensively. Dollar-cost averaging will not guarantee a profit or protect you from loss but may reduce your average cost per share in a fluctuating market. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment. It does not take into account the effects of inflation and the fees and expenses associated with investing. A diversified portfolio does not assure a profit or protect against loss in a declining mark.