Galaxy Digital Raises $175 Million for Inaugural Venture Fund: A Bold Bet on the Future of Crypto

Introduction

In a major milestone for the cryptocurrency and blockchain industry, Galaxy Digital—founded by former Goldman Sachs partner Mike Novogratz—has announced the final close of its first externally-backed venture vehicle, Galaxy Ventures Fund I, LP, with over $175 million in capital commitments as of June 26, 2025. Surpassing its initial $150 million target, the fund underscores Galaxy’s evolving strategy to solidify its presence in crypto venture capital—particularly during a period when sector fundraising remains difficult. Aimed at early-stage crypto startups, the fund targets stablecoins, decentralized finance (DeFi), and blockchain infrastructure, highlighting a market that is increasingly shifting from speculation to real-world utility.

Galaxy Ventures Fund I: A New Chapter for Galaxy Digital

Since its founding in 2018, Galaxy Digital has become a major force in the crypto space, with divisions spanning asset management, trading, mining, and venture investing. Prior to this fund, the firm had deployed its own capital to back over 120 startups, including notable names like Fireblocks. With Galaxy Ventures Fund I, Galaxy opens its doors to external investors for the first time—an oversubscribed raise that reflects institutional confidence in its investment thesis.

Led by General Partners Mike Giampapa and Will Nuelle, the fund has already deployed $50 million into early-stage companies including Monad, a high-performance blockchain for trading, and Ethena, a yield-bearing stablecoin protocol. The portfolio also features companies like 1Money, Arch Lending, Plume, Rail, Rain, RedotPay, Ubyx, and Yellow Card—a diverse mix focused on blockchain infrastructure, stablecoins, capital markets tooling, and real-world payment use cases.

Mike Novogratz noted, “Closing above target during one of the most difficult venture fundraising environments in recent history showcases our team’s unique edge in the market.” The fund attracted a mix of institutional investors, family offices, and digital asset businesses, even amidst persistent regulatory uncertainty.

Strategic Shift: From Balance Sheet to External Capital

Galaxy’s decision to bring in external capital marks a strategic pivot from its earlier model of self-funded venture investing. The collapse of FTX in 2022 was a catalyst, triggering a reevaluation of the crypto landscape and a shift toward projects with real-world utility. According to Giampapa, this fund is structured to deepen Galaxy’s reach into startups at the intersection of traditional finance and crypto.

Unlike corporate venture capital focused on synergy, Galaxy is returns-driven. By acting as both general and limited partner, it maintains strong conviction while leveraging outside capital to scale. The fund’s structure also allows Galaxy to back long-term plays in tokenization, payments, and onchain financial infrastructure—areas that saw $1.3 trillion in transaction volumes in Q1 2025 alone.

The fund’s first close of $113 million in July 2024 laid the groundwork for its final raise, a notable feat given that Q1 2025 marked one of the slowest crypto VC periods in three years, per Galaxy Research.

Broader Market Context: Crypto at a Crossroads

The crypto market in 2025 remains a high-volatility environment, shaped by global regulatory flux and mixed investor sentiment. Yet Galaxy’s successful raise coincides with growing institutional interest and improving U.S. regulatory clarity, including new pro-blockchain legislation passed by the House.

Stablecoins have emerged as a critical area of focus. Novogratz has publicly stated, “Stablecoins are going to be a huge part of the payment system.” With transaction volumes exceeding $1.3 trillion in Q1, these assets offer a compelling bridge between crypto and traditional financial rails. Galaxy’s backing of Ethena exemplifies this belief.

Still, challenges persist. Galaxy reported a $295 million net loss in Q1 2025, partly due to digital asset price declines and a mining impairment. The firm's 2022 exposure to the failed Luna stablecoin also serves as a cautionary tale. Nevertheless, its Nasdaq listing in May 2025 and a $29 million public offering reflect resilience and long-term strategic vision.

Building the Onchain Economy

Galaxy Ventures Fund I is more than a financial vehicle—it represents a long-term commitment to building the onchain economy. The fund targets projects in blockchain infrastructure, financialized applications, and interoperable software layers—aligned with Galaxy’s mission to fuel digital asset innovation.

Beyond capital, Galaxy offers portfolio companies in-house resources and integration into its broader ecosystem, spanning trading, lending, and infrastructure. With over 550 employees and deep sector expertise, the firm brings significant value to early-stage founders.

The portfolio reflects strategic alignment with high-growth areas. Monad tackles blockchain scalability for trading applications, while Yellow Card enables crypto payments in Africa. Others like RedotPay and Plume focus on real-world financial integration. Additionally, Galaxy’s S-1 filing with Invesco for a Solana-based ETF product suggests broader ambitions to bring crypto to mainstream financial markets.

Implications for the Crypto Industry

Galaxy’s $175 million raise has several notable implications:

Renewed Institutional Confidence: The fund's oversubscription suggests a resurgence of LP interest in early-stage crypto investments with solid infrastructure and real-world application focus.
Shift Toward Utility Over Speculation: Galaxy’s emphasis on stablecoins, tokenization, and DeFi reflects a maturing market that prioritizes practical use cases over hype-driven speculation.
Strategic Market Positioning: Galaxy’s dual role as GP and LP, combined with a public listing and diversified operations, gives it a strong position relative to other crypto-native venture firms.

Challenges and Risks

Despite momentum, Galaxy faces several headwinds:

Volatility and Regulation: Crypto prices remain erratic, and while U.S. regulations are becoming clearer, global uncertainty persists.
Performance Pressures: As Galaxy now manages external capital, it faces heightened expectations to deliver returns—especially under public market scrutiny.
Competition: The field of crypto venture capital is increasingly crowded, with both native and traditional VC firms vying for promising startups.

The Road Ahead

With $50 million already deployed and a robust deal pipeline, Galaxy Ventures Fund I is well-positioned to support the next wave of blockchain innovation. Its focus on infrastructure, payments, and stablecoins aligns with emerging adoption trends, particularly in tokenized finance and cross-border settlements.

Galaxy’s global footprint and proven operational expertise provide a competitive advantage in helping startups navigate a fast-changing regulatory and technological environment. Meanwhile, its initiatives like the Invesco Galaxy Solana Trust point to a future where crypto investing becomes more accessible across the retail and institutional spectrum.

Conclusion

The successful raise of $175 million for Galaxy Ventures Fund I marks a pivotal step in Galaxy Digital’s evolution—and a significant signal for the crypto industry at large. Surpassing its target during a historically tough fundraising cycle highlights Galaxy’s credibility, vision, and resilience.

With a focus on stablecoins, DeFi, and blockchain infrastructure, Galaxy is investing in the foundation of the next-generation financial ecosystem. As it continues to bridge the worlds of traditional and digital finance, Galaxy Ventures Fund I is poised to shape the onchain economy—and support the innovators building its future.