Galaxy Digital Unveils $100 Million Venture Fund for Crypto Startups

Galaxy Digital, an investment giant, is launching a $100 million fund to invest in early-stage crypto companies. The fund, Galaxy Ventures Fund I, will target financial applications, software infrastructure, and protocols built on crypto. It aims to invest in 30 startups over the next three years, with checks starting at $1 million. The fund's launch follows Galaxy's move to integrate its venture capital franchise into its asset management business in 2023.

Galaxy Digital Introduces $100 Million Venture Fund for Early-Stage Crypto Companies

Financial services behemoth Galaxy Digital is venturing into the realm of early-stage crypto investments with the establishment of a $100 million fund. This move marks a significant expansion of the company's venture capital arm, Galaxy Ventures, which was previously solely funded by Galaxy Digital's balance sheet.

The Galaxy Ventures Fund I will invest in approximately 30 crypto startups over the next three years, focusing on companies developing financial applications, software infrastructure, and protocols built on blockchain technology. The fund's investment strategy aligns with Galaxy Digital's broader belief in the transformative potential of cryptocurrencies and decentralized technologies.

"The new fund will continue the success of our proprietary balance sheet investing but through a direct, institutional-grade fund," Galaxy Digital stated in an email to investors.

SEC Opens Comment Period on Three Ether Spot ETFs

The U.S. Securities and Exchange Commission (SEC) has initiated a three-week comment period for three proposed ether (ETH) spot exchange-traded funds (ETFs). The proposals, submitted by Grayscale Investments, Fidelity, and Bitwise, seek to provide investors with a regulated and accessible way to gain exposure to the second-largest cryptocurrency.

Despite initial optimism following the SEC's approval of bitcoin spot ETFs in January, analysts have tempered their expectations for similar approvals for ether-based products. The SEC had previously resisted bitcoin ETF applications until a court ruling forced their hand. However, officials have since clarified that this decision does not extend to other cryptocurrencies.

VanEck Predicts $1 Trillion Valuation for Ethereum Layer-2 Networks

Investment firm VanEck has published a bullish report on Ethereum layer-2 (L2) networks, predicting a potential valuation of over $1 trillion by 2030. The report assesses 46 L2 networks across five key areas and anticipates the emergence of numerous successful rollups.

Arbitrum currently leads the L2 ecosystem with over $18 billion in locked tokens, capturing a significant portion of the $36 billion locked across all 46 networks evaluated. VanEck analysts project that Ethereum will ultimately command a 60% market share among all public blockchains, based on the volume of assets within its ecosystem.

Chart of the Day: Funding Rates Normalize after Bitcoin Price Pullback

Annualized funding rates for perpetual futures tied to the top 25 cryptocurrencies by market value have normalized to between 10% and 20% following a recent decline in bitcoin prices.

Elevated funding rates signal an influx of bullish leverage, which can often precede market corrections. Last month, funding rates spiked to over 100% for some cryptocurrencies, highlighting the speculative fervor that gripped the market.

Additional Noteworthy Developments:

• Wormhole's W token is offering astonishing returns of 999% a week on the Solana-based protocol Kamino.
• Crypto market maker GSR has secured a crypto license from the Monetary Authority of Singapore.
• Frax Finance expands to the Cosmos ecosystem through its new asset issuance chain, Noble.