According to Canaccord’s research report, the mainstream adoption of digital assets is anticipated to continue driving growth in the sector, with Galaxy Digital well-positioned to capitalize on these evolving trends.

Slow and steady adoption

Canaccord Genuity said in its research that crypto is being adopted at a “slow and steady” pace, which is positive for long-term growth.

According to the report, recent developments, such as the Securities and Exchange Commission’s (SEC) approval of eight spot Ethereum exchange-traded funds (ETFs), mark pivotal moments in the institutional acceptance of digital assets.

The regulatory progress is expected to pave the way for further approvals, setting the stage for broader adoption. Digital assets are now hovering near all-time highs, fueled by this incremental regulatory clarity and robust business execution by leading crypto firms.

The growing integration of crypto into traditional financial systems is further evidenced by partnerships between crypto companies and major financial institutions. These collaborations signify a deeper integration of digital assets into the global financial ecosystem, reinforcing the trend toward mainstream acceptance.

Galaxy Digital poised to benefit

Galaxy Digital, a prominent player in the crypto financial services sector, is well-positioned to benefit from this rising trend of mainstream adoption.

Canaccord Genuity has raised its price target for Galaxy Digital (GLXY) from C$17 to C$23, maintaining a buy rating on the stock. Galaxy Digital’s shares closed at C$16.25 on June 7.

The report highlighted Galaxy Digital’s strategic positioning and effective business execution as key factors for the positive outlook.

The firm has made significant inroads into the ETF market through partnerships with major financial firms like Invesco, DWS, and Itau, which are expected to drive substantial growth in the ETF space globally. Additionally, Galaxy Digital served as the exclusive financial advisor in Robinhood’s acquisition of Bitstamp, showcasing its robust investment banking capabilities.

The report also points to the potential for Galaxy’s Helios mining facility in west Texas to appreciate in value, particularly if the demand for energy-intensive Bitcoin mining from AI companies continues to rise. This trend is exemplified by Core Scientific’s recent strategic initiatives.

Canaccord’s report also highlighted Galaxy Digital’s strong financial position. At the end of Q1, the firm’s balance sheet showed over $2.2 billion in equity book value and $1.5 billion in liquid assets.

The firm said it expects Galaxy Digital to continue operating a little above breakeven, which raises the prospects of future growth and profitability.