Galaxy Digital Could Benefit From Improving Political Sentiment Towards Crypto in U.S.: Benchmark

• Benchmark assumed coverage of Galaxy Digital with a buy rating and a C$19 price target.

• The digital assets platform is set to benefit from improving political sentiment towards cryptocurrencies, the broker said

• The approval of spot bitcoin ETFs in January was a boost for the company, the report said.

Galaxy Digital (GLXY) is well positioned to benefit from resurgent crypto markets, U.S. political leaders’ improving sentiment towards digital assets, and the potential for increased adoption of bitcoin (BTC) and other cryptocurrencies, broker Benchmark said in a research report on Tuesday.

Benchmark assumed coverage of the digital assets platform with a buy rating and a C$19 price target. The shares closed over 6% higher on Monday at C$14.76. The company has a “solid balance sheet featuring $1.5 billion in liquidity, trading relationships with 1,161 counterparties, and support of more than 100 different crypto assets,” analyst Mark Palmer wrote.

Improving political sentiment towards crypto, as evidenced by the bipartisan passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) last month, improves Galaxy’s operating outlook in the U.S. but also increases the likelihood that the company will be able to list on Nasdaq, the report said.

The approval of 11 spot bitcoin exchange-traded funds (ETFs) in the U.S. in January was another major boost for the company, the note said, and it will likely also see tailwinds from bitcoin price appreciation arising from the recent halving event and from increased institutional demand.

With institutional adoption of digital assets about to take off, “Galaxy is positioned to secure a meaningful share of that market opportunity with GalaxyOne,” the prime brokerage business it launched last November, Palmer wrote.

Galaxy is also seeking to become an SEC-registered broker-dealer, which would put it in direct competition with Coinbase (COIN), the report added.