Galaxy Digital Initiates $100 Million Fund for Early-Stage Crypto Startups

Crypto mogul Mike Novogratz's firm, Galaxy Digital, is reportedly launching a $100 million venture fund aimed at supporting early-stage cryptocurrency startups. The majority of this funding is expected to come from external investors.

Galaxy Digital's venture arm, Galaxy Ventures, traditionally used its own capital for investments. However, it decided to open up its new fund, Galaxy Ventures Fund I, to outside venture capitalists last year, according to a source familiar with the matter, as reported by Bloomberg on April 4.

The minimum investment Galaxy Digital will make in startups through this fund is $1 million, the source added.

By establishing this fund, Galaxy aims to continue supporting the digital asset ecosystem by backing promising early-stage companies.

One of Galaxy Ventures' recent investments in the crypto startup space was a $2.7 million funding round it led for Citrea in February. Citrea is a project that aims to introduce zero-knowledge rollups (ZK-rollups) to the Bitcoin network.

Galaxy Digital has also raised and contributed to other funds. Its most recent contribution was to a $75 million fund for VC firm 1kx, which focuses on crypto-based consumer applications.

This move by Galaxy Digital comes amid a resurgence of venture capital flowing into the crypto space, following a relatively stagnant market in the previous year.

In March alone, crypto venture capital funding surged by over 50% month-on-month, reaching $1.16 billion across 180 publicly announced investments. This marks the highest monthly figure since April 2022.

Source: RootData

Other entities are also reportedly raising significant funds for investment in the crypto sector. Para is seeking to raise up to $850 million, Hack VC is putting together $150 million, and Andreessen Horowitz (a16z) has allocated $30 million for a fund focused on Web3 gaming.

This rush of venture capital comes as the approval of United States spot Bitcoin exchange-traded funds (ETFs) in January has driven a rally in the cryptocurrency's price, which has gained approximately 50% year-to-date.

Bitcoin's surge has also lifted the rest of the crypto market. The total crypto market capitalization, which was around $1.7 trillion at the beginning of the year, has now reached $2.61 trillion, inching closer to its all-time high of $3 trillion, according to CoinGecko.