Galaxy, Sharplink Launches $125M Institutional Defy Fund Using ETH Treasury

Digital asset company Galaxy and Ethereum treasury platform Sharplink Ether will launch a private fund investing in decentralized finance (DeFi) strategies, reflecting growing institutional interest in onchain production from crypto holdings.

The proposed fund, called Galaxy Sharplink Onchain Yield Fund, is expected to launch in the coming weeks with initial commitments of $125 million, the companies said Monday.

Sharplink plans to contribute $100 million from its Ether (ETH) treasury, while Galaxy will allocate $25 million and serve as the fund's manager.

The fund will allocate capital to DeFi liquidity protocols and other onchain product opportunities, aiming to generate additional revenue while enabling Sharplink to maintain its long-term exposure to Ether.

Galaxy CEO Mike Novogratz said the structure reflects growing institutional interest in blockchain-based investment products that offer products and risk management tools similar to those used in traditional finance.

The value of Sharplink's Ether portfolio. Source: CoinGecko

Sharplink is one of the largest corporate owners of Ether with over 868,000 ETH on its balance sheet. At the October market high, these holdings were worth nearly $4 billion.

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Sharplink posts Q1 loss of $686 million as ETH price plummets

Sharplink continues to expand its Ethereum treasury strategy despite suffering a heavy first-quarter loss due to the drop in Ether's price.

The company reported a loss of $685.6 million, or $3.25 per depositary share, on Monday, mainly due to non-cash accounting charges and lower ETH prices in the quarter. Of the total, $506.7 million is due to unexpected losses on Ether holdings.

Ether fell from $3,354 in mid-January to $2,104 on March 31, according to CoinMarketCap data. It last traded on Monday at around $2,339.

Revenue for the quarter rose to $12.1 million from $700,000 a year ago, reflecting the company's operating performance.

Since launching its Ether Treasury strategy in June 2025, Sharplink has received 18,800 ETH in cumulative stake rewards. The company ended the first quarter with $16.9 million in cash.

Sharplink balance as of March 31, 2026. Source: Sharplink

The results highlight the volatility associated with crypto-treasury strategies, particularly for companies that have held significant positions in the past year. Similar pressures have affected Bitcoin treasury companies, whose revenues can fluctuate wildly with asset prices.

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