Bloomberg: "The Princeton Mafia" is Sparking a Crypto Treasury Boom

Original Title: Inside the Princeton Network Fueling a Crypto Treasury Boom

Original Source: Bloomberg

Original Translation: Zhou, ChainCatcher

Crypto power players including Mike Novogratz of Galaxy Digital and Dan Morehead of Pantera Capital have repeatedly appeared in deal after deal, shaping one of the boldest bets in the new era of crypto: the digital asset treasury boom.

These publicly listed companies (about 85 this year and still increasing) have raised billions of dollars from investors ranging from the US and Gulf countries to Asia. Their strategy is to use Wall Street tactics to raise funds, hoard crypto assets, and then repeat the process. Week after week, many of the same names keep appearing in the industry’s boldest deals.

Novogratz, Morehead, and Joe Lubin (Ethereum co-founder) are Princeton classmates and longtime friends. They are not only veterans of the crypto industry but also central figures in this high-stakes digital asset push, just as the broader treasury wave begins to show signs of wavering—a bond that dates back to their undergraduate days at Princeton in the 1980s.

Back then, Novogratz and Lubin were college roommates—Novogratz was a wrestler from the East Coast; Lubin, a squash player skilled in computer science. Morehead was an engineering student and football player who lived nearby. These ties have shaped decades of crypto deal-making.

While tight-knit networks are common in traditional finance, the crypto industry is built on promises of decentralization and anonymity. Yet these familiar faces tell a different story, a dynamic that led Fortune magazine to jokingly dub them the “Princeton Mafia.”

Novogratz leads Galaxy, a digital asset financial services giant; Morehead is CEO of Pantera Capital, one of the earliest crypto investment firms; Lubin is a co-founder of Ethereum, runs blockchain software company Consensys, and serves as chairman of the publicly traded Ethereum treasury company SharpLink.

With momentum building and prominent figures at the helm, the question becomes whether DATs (Digital Asset Treasuries) can continue to deliver returns—or if they are built on shaky foundations.

“If you have a good story and a good storyteller, you can bring more capital to Solana or Ethereum, and faster than ever before,” Novogratz said in an interview.

Galaxy and Pantera are among the top ten DAT investors and lenders. This tight orbit also extends to deal brokers, with about a third of DAT deals involving the same small group of boutique investment banks. Overall, according to PitchBook data, the top ten DAT investors participated in about 14% of treasury deals over the past six months. Even excluding the biggest players—such as Michael Saylor’s Strategy Inc.—this year DATs have attracted a record $15.4 billions in new capital.

For these three Princeton alumni, none of this was pre-planned. But something has persisted since their undergraduate days: a risk appetite and a belief that “Wall Street can be rebuilt faster and lighter.” Each has carved out their own path in finance or tech. Then their paths began to cross again. For more than a decade, they have exchanged ideas and investments—sharing notes, backing projects, and occasionally joining forces.

In May, Lubin helped create the Ethereum treasury company SharpLink Gaming, with Pantera and Galaxy among its investors. Lubin said that friends only discuss DATs after investors are confirmed. Pantera and Galaxy are also both investors in Ethereum treasury company BitMine Immersion. “We’re friends, but we don’t see each other every day,” Lubin said in a recent interview. “But every time we meet, we have a lot to talk about.”

Their companies also compete. In September, Pantera backed a new Solana-focused DAT called Helius. Just days earlier, Galaxy helped launch a rival called Forward Industries. This was not a coordinated move. “It just so happened that our companies both launched Solana DATs within a week,” Morehead said. Novogratz echoed the sentiment: “We probably should have called each other, but we didn’t.”

Their paths keep crossing, sometimes purely by chance. When Morehead discovered that Novogratz had moved next door in Tokyo, the coincidence was almost surreal. Their alma mater now also reflects this shared legacy. In 2022, Novogratz, Lubin, Morehead, and Briger jointly funded Princeton University’s new Center for Decentralization of Power through Blockchain Technology.

When the US SEC signaled that it would not treat most tokens as securities, a trading window opened—paving the way for a strategy pioneered by Saylor: raise funds, buy crypto assets, ride the stock price up, and repeat. “We really started to get more creative and aggressive in our thinking,” Lubin said. “And it makes a lot of sense.”

This approach paid off—until it didn’t. In June, SharpLink, backed by Lubin, saw its stock price plunge 72% in a single day after filing for a stock offering. BitMine dropped 40% after filing similar paperwork. These sell-offs are a reminder of the gut-wrenching volatility inherent in high-wire crypto ventures.

“SharpLink is here for the very long term,” Lubin said. “Our current strategy is to continue raising funds under favorable conditions, continue buying ether and holding it long-term, and continue seeking and deploying ether in risk-adjusted, yield-positive scenarios.”

This week, more than $1.5 billions in positions were forcibly liquidated in the crypto market, with no clear trigger.

These participants are still expanding their reach. Galaxy often acts as a service provider—staking tokens, designing DeFi strategies, and advising teams. Pantera has more than $1 billions in DAT exposure and has backed over 15 companies. “DATs are indeed providing a new type of investor with a way into the blockchain market,” Morehead said.

Novogratz does not believe the market has peaked. “I don’t think all DAT companies will succeed, but if they can reach critical scale—boosting base token yields and building ecosystems—I think they’re good for crypto overall. These are the publicly traded companies that will be around for the long term.”

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