Galaxy Digital launches a $100 million hedge fund to capitalize on crypto opportunities

Galaxy Digital, the digital asset investment firm led by Mike Novogratz, is about to launch an ambitious $100 million hedge fund aimed at capitalizing on market dynamics in the cryptocurrency and fintech sectors. According to reports from the Financial Times, this strategic move is set against a backdrop of potential regulatory and monetary changes that are reshaping the global financial landscape.

The new hedge fund represents an evolution of Novogratz’s corporate strategy, which has already demonstrated adaptability to market conditions over the past few years. The launch is scheduled for the first quarter of 2026, with the fund operational immediately to seize emerging opportunities in real time.

Tactical Allocation Between Cryptocurrencies and Fintech

The fund’s investment strategy involves a balanced yet differentiated allocation. 30% of the capital will be directly invested in cryptographic tokens, leveraging volatility and appreciation opportunities in the digital market. The remaining 70% will focus on shares of companies operating in the financial services sector, which Galaxy believes are undergoing a profound transformation thanks to blockchain technology integration and evolving regulatory frameworks.

The fund will adopt a market-neutral strategy, taking both long positions—aimed at assets expected to appreciate—and short positions, betting against stocks that the asset manager considers overvalued. This bilateral approach allows the fund to generate returns regardless of the overall market direction.

Favorable Market Conditions and Institutional Support

The timing of this hedge fund’s launch coincides with a particularly attractive window of opportunity. Galaxy’s team, led by fund manager Joe Armao, has identified potential interest rate cuts by the Federal Reserve as a favorable factor, which could reduce the cost of capital and stimulate allocation toward alternative assets. Simultaneously, the global expansion of cryptocurrency adoption is creating new market dynamics and investment opportunities.

The fund has already gained support from family offices—individuals with significant net worth—and financial institutions, recognizing the strategic positioning value of Galaxy in the sector. Galaxy is also providing proprietary capital for the fund with an undisclosed amount, signaling confidence in the prospects of this investment vehicle.

Financial Strength and Expansion into Energy Mining

Galaxy Digital’s ability to launch this hedge fund is supported by a solid financial position. In Q3 2025, the company generated over $500 million in profits, consolidating its profitability in a positive market cycle. Currently, Galaxy manages a total of $17 billion in assets under management, reaffirming its role as a dominant player in digital asset investments.

Beyond asset management, Galaxy Digital is expanding its scope into energy infrastructure. Recently, it received approval from the Texas grid operator ERCOT for an additional 830 megawatts of energy capacity at its Helios data center campus in West Texas. This expansion represents a strategic investment in bitcoin mining and distributed computing sectors, increasingly crucial in the cryptocurrency value chain.

Despite the positive sector outlook, Galaxy Digital’s shares declined by 6.4% on Tuesday, in line with a broader correction in the cryptocurrency market that saw Bitcoin temporarily dip below $90,000. However, the hedge fund launch indicates that management maintains a constructive outlook on medium-term opportunities in the sector.