Galaxy Digital’s Shift from Ethereum to Solana: What’s Driving the Rotation?
Galaxy Digital, a prominent player in the crypto space, is making a strategic move away from Ethereum and towards Solana. Recent on-chain data from Lookonchain reveals that the firm has deposited 65,600 ETH (equivalent to approximately $105.48 million) to Binance over the past two weeks, indicating a potential sell-off. Concurrently, Galaxy has withdrawn 752,240 SOL (amounting to $98.37 million), showcasing a significant accumulation of Solana.
The rationale behind this rotation seems to be driven by several factors. Firstly, Galaxy’s decision to stake around $40 million worth of SOL suggests a long-term play in the Solana ecosystem. This move follows the firm’s previous exposure to the LUNA collapse, highlighting a more cautious approach this time around.
Solana’s growing popularity can be attributed to its high-speed transactions, low fees, and expanding developer activity. In contrast, Ethereum continues to grapple with scalability issues and mounting sell pressure. Galaxy’s pivot towards Solana indicates a belief in the platform’s stronger short-to-mid-term potential compared to Ethereum.
Interestingly, this isn’t the first time Galaxy has reduced its exposure to Ethereum. Back in late 2024, the firm had already diversified some of its Ethereum holdings into Bitcoin, aligning with the trend of large investors moving away from ETH.
Signs of Ethereum selling pressure have recently surfaced, with an old wallet linked to the Ethereum Foundation transferring 1,000 ETH (approximately $1.58 million) to Kraken. This wallet had initially received 84,513 ETH from the foundation almost a decade ago when ETH was priced at just $1.20. The current value of this stash exceeds $134 million.
The Ethereum Foundation’s history of selling ETH before market downturns is noteworthy. In 2024 alone, it sold 4,466 ETH for around $12.61 million, with key sales preceding price drops. Following the latest transaction, ETH has experienced a 4% decline, including a 1.3% drop in the last 24 hours.
In terms of price analysis, ETH’s recent performance hasn’t been promising, with consecutive monthly declines. With major players like Galaxy Digital shifting focus from ETH to alternatives like Solana, Ethereum’s dominance could face further challenges. Continued sell-offs coupled with Solana’s growing ecosystem momentum could impact the market dynamics significantly.
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