Galaxy Digital and Sharplink Launch $125M Ethereum DeFi Yield Fund

TLDR

• Galaxy Digital and Sharplink are launching a $125M fund to earn yield from Ethereum via DeFi strategies.
• Sharplink will contribute $100M in staked ETH; Galaxy commits $25M and will manage the fund.
• Sharplink reported a net loss of $685.6M in Q1 2026, mostly from unrealized losses on its ETH holdings.
• Ether fell from around $3,354 in mid-January to $2,104 by end of March before recovering slightly to $2,339.
• Galaxy stock has risen 118.5% over the past year; Compass Point raised its price target to $41.

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Galaxy Digital and Sharplink have agreed to launch a new fund that will put Ethereum holdings to work inside decentralized finance, even as Sharplink absorbed one of the largest quarterly losses tied to falling crypto prices.

The two companies signed a non-binding agreement to create the Galaxy Sharplink Onchain Yield Fund. The fund is expected to launch in the coming weeks with $125 million in initial commitments. Sharplink will contribute $100 million from its staked Ethereum treasury. Galaxy Digital will put in $25 million and act as the fund’s investment manager.

The fund will deploy capital into DeFi liquidity protocols and other onchain yield-generating strategies. The goal is to earn additional returns on Ethereum holdings without selling the underlying asset.

Sharplink holds more than 868,000 ETH on its balance sheet. At peak market prices last October, those holdings were worth close to $4 billion. The company has been building its Ethereum treasury since June 2025 and has earned around 18,800 ETH in staking rewards since then.

Galaxy CEO Mike Novogratz said institutional demand for onchain products has grown to the point where investors can now access yield, liquidity, and risk management tools similar to those found in traditional finance.

Sharplink CEO Joseph Chalom said the partnership is designed to compound the company’s treasury while also contributing to the broader onchain financial ecosystem. Chief Investment Officer Matthew Sheffield added that the structure is built to keep the company’s core staked ETH exposure intact while generating excess returns for shareholders.

Sharplink Posts $685.6M Q1 Loss

Despite the new fund announcement, Sharplink reported a net loss of $685.6 million for the first quarter of 2026, or $3.25 per diluted share.

The bulk of that loss, about $506.7 million, came from unrealized losses on its Ether holdings. Ether dropped from roughly $3,354 in mid-January to $2,104 by March 31, according to CoinMarketCap data. It was trading at around $2,339 at the time of the announcement.

Revenue for the quarter rose to $12.1 million, up from $700,000 a year earlier, driven by growth in its operating business. The company ended Q1 with $16.9 million in cash.

Galaxy Digital Remains Unprofitable but Outperforms

Galaxy Digital also reported first-quarter 2026 results. The company posted a GAAP net loss of $216 million, or $0.49 per share, mainly from unrealized losses on digital asset holdings.

Trading volumes in Galaxy’s Global Markets division held steady quarter-over-quarter, even as industry-wide volumes fell more than 25%. Analysts at H.C. Wainwright and Rosenblatt reiterated Buy ratings on the stock following the results. Compass Point raised its price target to $41 from $40, citing progress in the company’s high-performance computing pipeline. Goldman Sachs kept a Neutral rating with a $21 price target.

Galaxy’s stock has climbed 118.5% over the past year and was trading at $29.01 at the time of the announcement. The company’s current ratio of 1.7 shows liquid assets exceed short-term obligations.

The fund agreement remains subject to final documentation before it becomes binding.

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