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Mike Novogratz’s Crypto merchant bank Galaxy Digital to roll out a suite of Ethereum funds

  • Mike Novogratz’ Galaxy Digital is rolling out Ethereum Funds to attract institutional investors.
  • The fund seeks to give institutional investors exposure to Ether while mitigating the risk that comes with directly buying and owning crypto.
  • Galaxy digital is bullish on Ethereum.

Mike Novogratz’s crypto merchant bank Galaxy Digital has given Ether the vote of confidence that 2021 is the year the second-largest cryptocurrency will come out of bitcoin’s shadow and become an attractive investment option for institutional investors.

According to a notice sent to Galaxy’s clients, the merchant bank is planning to launch a suite of Ethereum products in mid-February. The plans for the family of Ethereum-focused-funds is a clear indication that Galaxy is bullish on Ethereum.

“The Galaxy Ethereum Fund (the “Fund”) is a private fund designed to provide institutional-quality exposure to ETH.”

The Galaxy Ethereum fund will not deviate much from similar products in the industry as it aims to give institutional clients exposure to  Ether without the need to go through the challenges of buying and storing the digital asset.

“The Fund seeks to mitigate the complexities of investing in digital assets by providing investors with outsourced trading, operations, finance, and custody / digital asset private key protection services,” reads the document.

Per the document, the fund’s pricing will “be based on the Bloomberg Galaxy Ethereum Index, a pricing source administered and calculated by Bloomberg.”

Galaxy’s view on Ethereum

Galaxy considers smart contracts – small programs that are executed when pre-defined conditions are met – to be a game-changer that enhance the functionality of blockchains. They have created the “backbone of a new internet and is protocols,” says Galaxy.

The merchant bank noted that after only five years of its launch, Ethereum has facilitated ecosystems worth billions of dollars.

Galaxy’s timing is in sync with what is happening in the market. The CME Ether futures is expected to go live on Feb. 7. The futures products of both CME and Galaxy provide a clear sign that institutional appetite for Ether is growing. 

Galaxy Digital could not leave behind decentralized finance (DeFi) in its document and highlighted that six applications in the space “are now worth more than $1bn and are generating up to $100s of millions in annualized revenue.”

Ether is currently trading at $1,382, a drop of 6% from its all-time high of $1,467 reached on Jan. 25, CoinMarketCap data.

Novogratz bought half a million Ether from Buterin in 2015 at a price of $0.99 each.

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