Galaxy Digital founder and CEO Mike Novogratz may be long on Ethereum, but that didn’t stop him from calling it like he sees it as the token has failed to keep pace with other cryptocurrencies like bitcoin and Solana.

"Sentiment is unbelievably bearish," Novogratz said in an interview posted on Wednesday. 

So why has Ethereum’s price been, for several months, underperforming when compared to peers? Novogratz offered his perspective: "The biggest reason, I think, for outperformance is Gensler leaned on ETH, he was suing Consensys, is it a security or not a security?” he said. "So you had some regulatory pressure on Ethereum."

Last April, when Gary Gensler was still chair of the U.S. Securities and Exchange Commission, Consensys sued the the regulator, in part over how the agency categorized ether as a security. Later in the year, the SEC approved the launch of spot ether ETFs.

While both BTC and SOL recently achieved all time highs amid a new bullish cycle, ETH's price trajectory has been erratic, with the token steadily declining in price since mid-December. Trading at about $2,700 as of Thursday, according to The Block Price Page, ether is up about 15% during the last year, compared to Bitcoin and Solana tokens, which are both up by more than 100% in the last 12 months.

When discussing the investment narrative for Ethereum and how it differs to that of Bitcoin, which has been garnering increased media attention since now President Donald Trump spoke at Bitcoin 2024, Novogratz said the original reason for investing in Ethereum has perhaps changed as of late.

"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," said Novogratz. "The reality for all crypto ecosystems, is narrative brings an enthusiasm, and enthusiasm creates value."

Novogratz also addressed issues related to the Ethereum Foundation.

“The Vitalik, ETH Foundation a little bit of a FUD. People are looking for excuses," he said. "The foundation should continue to take the high road … they should be a research organization and organizations like a Consensys, or others that are engaged, should be the advocates."

Ethereum has recently been suffering from controversy with people taking to social media platforms like X and Discord to debate the protocols future. Simultaneously, some of Ethereum’s biggest defenders have even declared losing hope in the protocol.

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