Mike Novogratz’s Galaxy Digital Ditches $100M in ETH for Solana’s SOL as Ethereum Faces Decline
Mike Novogratz’s investment firm, Galaxy Digital, has swapped a massive $100 million worth of ether (ETH) for solana (SOL), according to on-chain data. This move signals a shift in strategy as the firm moves away from Ethereum amid concerns over its long-term viability.
In the past two weeks, Galaxy Digital transferred approximately 65,600 ETH—valued around $105 million—to Binance, and in exchange, withdrew a total of 752,240 SOL, worth about $98.37 million. The decision to move heavily into Solana comes after a series of downward revisions for Ethereum’s outlook by major financial institutions.
Ethereum has been struggling, with its price falling nearly 20% over the past month, while Solana has been on an upward trajectory, rising 8% in the same time frame. According to a recent report from Standard Chartered, Ethereum is facing a “structural decline,” with slower transaction speeds and scalability issues compared to competing networks like Solana.
While Ethereum’s growth continues to be hindered by these issues, Solana has seen impressive growth in blockchain activity. DEX volume on Solana recently surpassed $500 billion, while Ethereum’s was just under $400 billion. Additionally, Solana’s active addresses have ballooned to over 220 million, compared to Ethereum’s 80 million active addresses, including Layer-2 solutions.
Galaxy Digital, which still holds $87.9 million in ETH, has diversified into Solana, whose lower fees and faster transaction speeds have made it an attractive alternative. The shift away from Ethereum also comes at a time when investors have pulled nearly $600 million from Ethereum-focused ETFs, further indicating a lack of confidence in the network.
Proposals to address Ethereum’s challenges, such as imposing a tax on Layer-2s to buy back and burn ETH, have been suggested by prominent figures like Justin Sun but have yet to gain traction in the form of an Ethereum Improvement Proposal (EIP).
As Galaxy Digital continues to bet on Solana, the growing interest in alternative blockchains may signal a broader shift in the crypto ecosystem, where scalability and efficiency take precedence over Ethereum’s once-dominant position.
