April 4, 2024

Galaxy Digital’s venture team has long invested its own money in crypto companies. Now, it’s planning to do that with outside investors’ capital, too. The investments giant is putting together a $100 million fund that will invest in early-stage crypto companies, according to an investor email shared with CoinDesk. Galaxy moved its venture capital franchise into its asset management business in 2023. The Galaxy Ventures Fund aims to invest in as many as 30 startups over the next three years, with checks starting at $1 million. It will target financial applications, software infrastructure and protocols built on crypto, the email said. The new fund “will continue the success of our proprietary balance sheet investing but through a direct, institutional-grade fund,” the email said.

Galaxy Digital CEO Mike Novogratz (Danny Nelson/CoinDesk)

The U.S. Securities and Exchange Commission opened the window for comments on three ether (ETH) spot exchange-traded fund (ETF) proposals. The ETF efforts tied to Grayscale Investments, Fidelity and Bitwise will be subject to a three-week comment period, according to notices posted Tuesday by the agency "to solicit comments on the proposed rule change from interested persons." Despite rising expectations after the agency's approval of bitcoin spot ETFs in January, industry analysts have become less optimistic that the regulator will follow suit with products tracking the Ethereum blockchain's token. The commission had been pressured into abandoning its opposition to the bitcoin applications after a key loss in a court dispute with Grayscale, and SEC officials said the resulting approval of bitcoin ETFs doesn't apply to other tokens.

Investment firm VanEck predicts Ethereum layer-2 (L2) networks could be valued at over $1 trillion by 2030 in a base-case scenario but remains “generally bearish” on the long-term prospects of several such networks. The firm evaluated 46 L2 networks across five key areas and predicted “thousands” of rollups will eventually emerge. Arbitrum is currently the biggest ecosystem, with over $18 billion in locked tokens, data shows, capturing the majority of $36 billion locked across 46 networks. VanEck analysts Patrick Bush and Matthew Sigel estimated that Ethereum will eventually capture 60% of the market share across all public blockchains. They modeled their estimate around the volume of assets within the Ethereum ecosystem.

Leveraged funds, which the Commodities Futures Trading Commission (CFTC) describes as hedge funds and commodity trading advisers, held record bearish wagers on the bitcoin (BTC) price at the end of the first quarter as the cryptocurrency's rally stalled near record highs.

Hedge funds boosted their net short positions in the Chicago Mercantile Exchange's (CME) standard bitcoin futures contracts to 16,102. That's the most since the futures began trading in late 2017, according to CFTC figures published last week. CME's standard bitcoin futures contracts are sized at 5 BTC.

A short futures position is a trading strategy in which a trader sells a futures contract to profit from or hedge against an expected drop in the underlying asset's price. Carry traders or arbitrageurs short futures while simultaneously buying the asset to safely pocket the price differential between the spot and futures market.

- Omkar Godbole