Galaxy Digital CEO Mike Novogratz’s Take on Ethereum

Mike Novogratz, founder and CEO of Galaxy Digital, expressed concerns over Ethereum’s underperformance compared to other cryptocurrencies like Bitcoin and Solana.

> “Sentiment is unbelievably bearish,” said Novogratz in a recent interview.

Underperformance Reasons

Novogratz attributed Ethereum’s struggles to regulatory pressures, particularly from the SEC under Gary Gensler. He cited the lawsuit involving Consensys, questioning whether ether is considered a security.

Last April, Consensys filed a lawsuit against the SEC regarding how the agency categorizes ether. Despite this, the SEC later approved the launch of spot ether ETFs.

Erratic Price Movement

While Bitcoin (BTC) and Solana (SOL) reached all-time highs recently, ETH’s price has been inconsistent, declining since mid-December. As of Thursday, ether was priced at approximately $2,700, marking a 15% increase over the past year, in stark contrast to BTC and SOL, both up over 100% in the same timeframe.

Changing Investment Narrative

Novogratz noted that the narrative behind investing in Ethereum seems to have shifted.

> “Most of the market cap of Ethereum right now is store of value, but what got people there is a narrative about this is going to be web3,” he stated.

He emphasized that the crypto ecosystem thrives on narratives that generate enthusiasm, which in turn creates value.

Foundation Concerns

He also addressed concerns regarding the Ethereum Foundation.

> “The Vitalik, ETH Foundation is a little bit of a FUD. People are looking for excuses.”

Novogratz suggested that the foundation should take a higher road, focusing on research, while organizations like Consensys should act as advocates.

Amid rising controversies and debates within social media platforms like X and Discord, even some strong supporters of Ethereum are beginning to lose faith in the protocol.