Novogratz’s Galaxy Offloads $105M in Ethereum for Solana

In a bold move against the world’s second-largest crypto asset, Mike Novogratz’s Galaxy Digital has offloaded approximately $105 million worth of Ethereum (ETH) in favor of Solana (SOL).  

The move comes even as more investors grow wary of Ethereum due to its scalability challenges, high transaction fees, and increasing competition from faster, more efficient networks like Solana.

“It seems that Galaxy Digital is selling ETH and buying SOL.” Lookonchain tweeted on Tuesday “In the past 2 weeks, Galaxy Digital deposited 65,600 ETH ($105.48M) to Binance and withdrew 752,240 SOL ($98.37M) from Binance.”

The move also comes amid shifting market dynamics between Ethereum and Solana. According to Dune Analytics, decentralized exchanges (DEXs) on the Solana network have processed over $395 billion in trading volume over the past three months, surpassing Ethereum’s $364 billion in the same period. Moreover, the number of active Solana addresses has hit 224 million, far exceeding Ethereum’s 79 million.

These developments appear to align with the firm’s recent involvement in Solana’s protocol governance. On April 17, the firm proposed a new voting system dubbed “MESA” to introduce a market-driven approach to Solana’s inflation control. MESA follows SIMD-228, a previous proposal that failed to reach consensus on specific parameters. Under current rules, Solana’s inflation begins at 8% and tapers to 1.5% annually. The present rate is 4.6%, with over 64% of SOL locked in staking.

Galaxy’s growing focus on Solana echoes a broader sentiment shift within the crypto industry. In March, Ordinals co-founder Casey Rodarmor stated that Ethereum “has nowhere to go,” citing its scalability struggles and rising competition from faster, lower-cost networks like Solana. He also emphasized Bitcoin’s prestige and security while dismissing Ethereum’s long-term prospects.

Although Ethereum remains the largest DeFi ecosystem, Solana’s rise in user activity, network performance, and DEX volume has made it a formidable competitor. In July 2024, Solana overtook Ethereum in monthly DEX volume for the first time, $56.84 billion compared to Ethereum’s $53.86 billion. Since then, the competition between the two has remained tight.

However, ETH has been trying to regain its glory and attract users with Ethereum co-founder Vitalik Buterin proposing significant changes to the network’s proof-of-stake (PoS) consensus mechanism. The proposal aims to reduce the number of validator signatures required per slot from approximately 28,000 to 8,192, thereby decreasing the network’s computational load and enhancing scalability.​

At press time, Solana was trading at $146.65, up 0.52% in the past 24 hours, while Ethereum sits at $2,518, down 0.40% in the same period.