Galaxy Digital has secured a $500 million warehouse lending facility from Grove to expand its institutional crypto-backed lending business. According to reports from Investing.com, this marks another step in the adoption of traditional credit structures within digital asset markets. Under the agreement, Grove will provide the capital that enables Galaxy to originate institutional loans secured by digital assets, while Galaxy will underwrite, service, and manage the lending portfolio. The facility represents an expansion of the relationship between the two firms, building on Grove's participation in Galaxy's first tokenized collateralized loan obligation with a $50 million investment in December 2025.
The facility applies a warehouse lending model commonly used in traditional finance to crypto-backed lending. As reported by Investing.com, warehouse facilities provide lenders with lines of credit to finance loan origination before those assets are packaged or refinanced. Under the new arrangement, Galaxy will originate institutional loans backed by digital assets, with Grove supplying capital through a dedicated lending vehicle funded in USDS. The structure is designed to support Galaxy's institutional lending operations while providing Grove with exposure to a portfolio of overcollateralized crypto-backed loans, positioning Grove earlier in the credit chain by providing funding for new loan origination rather than purchasing interests in completed loan pools.
The warehouse facility includes several institutional risk controls with eligible collateral limited to Bitcoin [BTC] and Ether [ETH], including natively staked and liquid-staked ETH, with assets held by qualified custodians Anchorage Digital and BitGo. According to the companies, loan-to-value ratios are monitored continuously using Chronicle price feeds, and concentration limits restrict ETH-backed loans to no more than 50% of the facility, with staked ETH limited to 50% of that share. The facility is secured at two levels, with Grove's financing secured against the loan portfolio and each underlying loan overcollateralized with cryptocurrency pledged by borrowers. Loans eligible for the portfolio must be senior secured and fully funded with original terms of two years or less, with no more than 20% of the facility consisting of loans with original terms beyond one year.
The facility announcement comes as Galaxy Digital continues to demonstrate strong financial performance, reporting $58.7 billion in revenue over the last twelve months with 25% revenue growth, though the company remains unprofitable with a beta of 3.61. Galaxy's stock has declined roughly 24% over the past six months, currently trading at $23.47. Recent developments include the completion of Phase I at its Helios data center campus in West Texas, delivering approximately 200 megawatts of gross power under a 15-year lease agreement with CoreWeave. The company has also made strategic investments in Digital Prime Technologies and appointed Steven Bandrowczak as an independent director to its board, where he will also serve on the audit committee. In terms of analyst activity, Compass Point lowered its price target for Galaxy Digital to $40 from $41, maintaining a Buy rating, reflecting ongoing strategic initiatives and market evaluations.
