- Galaxy plans a $100M hedge fund for crypto and related stocks, set for Q1. It will run long and short, with up to 30% in tokens and the rest in financial services names tied to digital asset laws and tech.
- About $100M is committed by family offices, high-net-worth and some institutions, with Galaxy adding seed capital. Launch comes after a 28% bitcoin drop since October and a 5% weekly slide to around $90,000.
The launch of a new $100M crypto hedge fund by Galaxy, the digital assets group led by US billionaire Mike Novogratz, signals a fresh approach to trading digital assets during a period of sharp market volatility. Galaxy, which already oversees roughly $17 billion in digital assets, plans to roll out this vehicle in the first quarter of the year, aiming to profit from both rising and falling prices in crypto markets and related financial stocks. The $100M crypto hedge fund arrives just after a steep 28% drop in bitcoin from its October peak and during a week where the leading cryptocurrency slipped another 5% to trade around $90,000, underscoring the choppy backdrop that the new strategy intends to address.
Structure and strategy of the $100M crypto hedge fund within Galaxy
Galaxy’s $100M crypto hedge fund will operate as a long–short vehicle that can position for both gains and declines across a mix of digital tokens and traditional equities. According to people familiar with the plan, the fund already secured approximately $100 million in commitments from family offices, high-net-worth investors and several larger institutions, though final launch assets may exceed that figure if additional commitments close before the first quarter start. Galaxy itself will make a seed investment in the fund, but it has not disclosed the size of this internal capital, which still signals that the firm wants aligned interests between its balance sheet and outside investors. In terms of allocation, the $100M crypto hedge fund intends to invest up to 30% of its capital directly into crypto tokens such as bitcoin, ether and Solana, while deploying the remaining majority into financial services stocks that sit at the intersection of digital asset technology, changing regulation and traditional finance. This blended structure reflects the view inside Galaxy that the impact of digital assets extends far beyond token prices alone. On one side, the fund can trade major cryptocurrencies, taking advantage of volatility through directional bets and relative value positions. On the other, it can target listed companies that may benefit from or suffer due to shifts in regulation, adoption and competition emerging from blockchain infrastructure, stablecoins, exchanges and tokenisation. Joe Armao, who heads the fund, framed the idea as finding “winning and losing companies” across financial services, and looking at “disrupters, winning and losing themes” rather than treating crypto as an isolated niche. The strategy allows exposure to themes such as payments innovation, on-chain settlement, custody services and digital asset market infrastructure, but through liquid stocks that tie back to developments in the broader ecosystem. Galaxy brings significant experience to this structure. Novogratz launched the firm nine years ago with an initial plan to run a hedge fund before he pivoted toward a broader platform in investment banking and asset management. He cited unfavourable market conditions at the time and said that “emotionally, it didn’t feel right” to proceed under the original hedge fund model. Since then, Galaxy has grown into a diversified digital assets group, and it posted $505 million in profits in the third quarter of 2025, which gives context for why it now feels ready to introduce a dedicated $100M crypto hedge fund into its product line. The new fund leverages Galaxy’s existing trading desks, research coverage and relationships across exchanges and counterparties, which could help it navigate periods of rapid price swings.
Macro backdrop, Bitcoin drawdown
The timing of the $100M crypto hedge fund stands out because it follows a significant correction in bitcoin, still the largest cryptocurrency by market value. Since reaching its peak in October, the price has fallen about 28%, leaving it below levels seen when Donald Trump entered the White House in January of the previous year. Bitcoin slid another 5% this week alone and currently trades around $90,000, after Trump threatened tariffs on European countries that do not support his controversial proposal to seize Greenland. These geopolitical statements add another layer of uncertainty on top of existing macro concerns, which already include interest rate expectations, inflation trends and risk sentiment in equities and gold. Against this backdrop, Joe Armao described the possibility that the “‘up only’ phase of this cycle is potentially coming to an end”. He still remains constructive on core assets such as bitcoin, ETH and Solana, but his comments stress a shift from a simple buy-and-hold mentality toward a more active, trading-led approach. The $100M crypto hedge fund structure supports that shift. It can profit in both directions if it correctly identifies overvalued and undervalued assets, while also using short exposure to hedge downside risk during prolonged drawdowns. Armao also pointed to the wider macro context, arguing that bitcoin “can’t be ignored this year in a backdrop of further [Federal Reserve interest rate] cuts, assuming equity markets and gold stay healthy”. Lower rates often support speculative assets, but if stock markets or gold show strain, correlations can change quickly, which reinforces the case for flexible long–short strategies instead of passive exposure. The environment for digital assets has grown more complex in parallel with this macro landscape. Regulatory debates continue across major jurisdictions, shaping how exchanges operate, how stablecoins issue and redeem, and how banks can hold or service crypto clients. That mix of policy change and market volatility creates both risks and opportunities. The $100M crypto hedge fund attempts to stand in the middle of that tension, capturing moves triggered by new laws and enforcement actions without committing exclusively to bullish or bearish positioning. In addition, the presence of a US president who vows to make the country the “crypto capital of the world” adds political noise that can move markets without changing underlying technology fundamentals.
Equity themes, financial services disruption and targets for the $100M crypto hedge fund
The equity side of the $100M crypto hedge fund will give it a broader canvas than pure token strategies. Armao highlighted several areas where he expects meaningful change, starting with financial services companies that face pressure from digital asset technologies and artificial intelligence. Banks, payment networks, financial software firms, data and analytics providers, and rating agencies all sit in the path of these disruptions. Many already show stress in their share prices. For example, he pointed to major payments groups such as Fiserv, which fell about 50% in the previous year. Meanwhile, some data, analytics and ratings companies sold off by roughly 30% in just a quarter, mainly on fears around how AI could reshape their business models and pricing power. These declines create a wide dispersion of valuations that a long–short manager can use. On one side, the $100M crypto hedge fund can back companies that adapt well to blockchain and AI, either by integrating new technology into their operations or by offering infrastructure that underpins digital asset markets. On the other, it can short firms that resist change or hold legacy models that face erosion from faster, cheaper or more transparent systems built on decentralised rails. The fund also has scope to trade newly listed crypto-native companies. In the past year, stablecoin issuer Circle and exchange Gemini both went public, while hundreds of digital asset treasury companies listed around the world, adding fresh supply of equity tied directly to on-chain activity. This growing universe of public companies gives hedge funds more ways to express views on digital asset adoption than in previous cycles. Instead of holding only tokens, managers can build portfolios that reflect entire value chains, from exchanges and custodians to payment processors and software vendors. The $100M crypto hedge fund uses up to 70% of its capital to pursue these themes through stocks rather than coins, which may appeal to allocators who want crypto-related exposure but still need the governance, reporting and regulation that public equity markets provide. At the same time, the volatility of these names can rival or exceed that of underlying tokens, which demands strict risk controls and careful position sizing.
Investor base, risk profile and outlook for the $100M crypto hedge fund
The investor mix for the $100M crypto hedge fund reflects growing institutional interest despite the recent sell-off. Family offices and high-net-worth individuals form a core base, familiar with alternative investments and often comfortable with higher volatility in pursuit of returns. The presence of larger institutions indicates that some traditional allocators now view long–short crypto and fintech strategies as part of a broader hedge fund allocation rather than an experimental sideline. Galaxy’s own seed capital signals commitment and should help absorb early volatility in flows or performance. Still, prospective investors will focus on risk management, given the fund’s ability to short assets and the combined exposure to tokens and equities. Key risks include sharp drawdowns in digital asset markets, correlation spikes across crypto and growth equities, and unexpected regulatory actions that can hit both tokens and listed companies at the same time. Geopolitical developments, such as tariff threats or new sanctions regimes, add extra uncertainty. The $100M crypto hedge fund must also navigate liquidity risk, especially in smaller tokens or less liquid equity names tied to digital assets, as well as operational risks that arise when trading across multiple exchanges and counterparties. Galaxy’s existing infrastructure and history of managing $17 billion in assets helps address some of these concerns, but it cannot remove them entirely. Performance will depend on the team’s ability to distinguish durable trends from short-lived narratives and to adjust exposure as conditions change. Looking forward, the success of this $100M crypto hedge fund could influence the next wave of products in the sector. Strong results may encourage more managers to launch similar multi-asset vehicles that blend tokens with financial services equities, while weak performance could reinforce caution among more conservative investors. The fund also serves as a test of whether active long–short strategies can deliver attractive risk-adjusted returns in a market where passive exposure to bitcoin and ether has dominated recent inflows. As digital asset technologies continue to reshape payments, banking, market infrastructure and data services, strategies that track both crypto and the stocks linked to its adoption may become a standard part of the hedge fund landscape.
Conclusion
Galaxy’s $100M crypto hedge fund arrives at a moment when bitcoin has fallen 28% from its October peak and trades near $90,000 after a further 5% weekly slide, while digital asset regulation and macro uncertainty continue to shift. The fund will allocate up to 30% of its capital to tokens and the rest to financial services stocks exposed to blockchain, regulation and AI, giving it a broad toolkit to trade both winners and losers. Backed by roughly $100 million from family offices, wealthy individuals and institutions, and supported by Galaxy’s $17 billion platform and its recent $505 million quarterly profit, the strategy aims to capture opportunities across a sector undergoing deep change. How the $100M crypto hedge fund performs in this environment will help show whether active, long–short approaches can stand beside more established passive crypto products in the portfolios of global investors.
Disclaimer
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