Galaxy, Sharplink to launch $125M ETH-backed DeFi fund

Galaxy and Sharplink will launch the Galaxy Sharplink Onchain Yield Fund, a $125 million private vehicle that will invest Ether in decentralized finance liquidity and onchain yield strategies. Sharplink plans to back the fund with $100 million of staked ETH from its treasury and Galaxy will commit $25 million and serve as manager. The firms expect to launch the vehicle in the coming weeks.

The fund will allocate capital to DeFi liquidity protocols and other onchain yield opportunities with the objective of generating additional returns while allowing Sharplink to retain long-term exposure to Ether. Sharplink’s $100 million contribution will come from its staked Ether holdings. Galaxy will oversee portfolio construction, risk management and fund operations.

Sharplink holds more than 868,000 ETH on its balance sheet. At October market highs those holdings were valued at nearly $4 billion. The company began its Ether treasury strategy in June 2025 and has since earned roughly 18,800 ETH in cumulative staking rewards.

Sharplink reported a net loss of $685.6 million for the first quarter, driven mainly by non-cash accounting charges tied to a decline in Ether’s price; about $506.7 million of the loss was attributed to unrealized losses on its ETH holdings. Revenue for the quarter rose to $12.1 million from $700,000 a year earlier, and the company ended the period with $16.9 million in cash.

Ether’s market price fell from a mid-January high near $3,354 to about $2,104 at the end of March and was trading around $2,339 when the fund was disclosed.

Mike Novogratz, Galaxy’s chief executive, described the fund structure as reflecting growing institutional demand for blockchain-based investment products that combine yield with risk management tools used in traditional finance.

The fund is structured to channel institutional capital into blockchain-native yield strategies while preserving Sharplink’s principal ETH exposure rather than liquidating tokens to generate cash. Galaxy’s role as manager positions the firm to run onchain operations and enforce risk controls for the vehicle.