Galaxy Digital Holdings Ltd. (GLXY) saw its shares plummet 5.10% during pre-market trading on Wednesday, reflecting significant negative sentiment toward the cryptocurrency-focused financial services firm.

The sharp decline follows target price reductions from two major investment banks. Rosenblatt Securities lowered its target price for Galaxy Digital to $39 from $46, while Morgan Stanley cut its target to $36 from $43. These analyst actions came after the company reported disappointing fourth-quarter results, with a loss per share of $1.08 that was significantly wider than the anticipated loss of 52 cents per share.

Further contributing to the negative outlook was a reported 40% quarter-over-quarter decline in digital asset trading volumes, indicating weakening trading activity for the company. While CEO Mike Novogratz downplayed long-term concerns about quantum computing's impact on Bitcoin, the broader market concerns and poor financial performance appear to have driven the sell-off.