Galaxy to launch $100M Hedge Fund to trade crypto up and down.
Mike Novogratz's digital asset company Galaxy is preparing to launch a $100 million hedge fund to capitalize on both rising and falling crypto prices.
The fund is slated to launch in the first quarter and is structured to hold long and short positions in digital assets and traditional stocks related to financial infrastructure, the Financial Times reported on Wednesday.
Up to 30% of the fund's capital will be allocated directly to crypto tokens, with the remainder to financial services stocks that are expected to influence digital asset management, blockchain adoption and technological change, according to the report.
The fund has already secured $100 million from family offices, high net worth individuals and select institutional investors. Galaxy confirmed to the FT that it would make a seed investment, but declined to disclose the amount.
Related: Wealth transfer will boost crypto adoption among young investors: Galaxy exec
Crypto's “only on” phase is ending.
Joe Armao, who heads the new fund, said the market is entering another phase. “The ‘only up' part of this cycle may be coming to an end,” he told the newspaper, while maintaining a positive outlook on major assets including Ethereum (ETH) and Solana (SOL). Armao added that Bitcoin (BTC) will remain valuable in an environment shaped by the US Federal Reserve's rate cut, while stocks and gold will remain resilient.
Beyond crypto-native companies, Galaxy is also looking at traditional players. Citing sales of payments and data companies like Fiserv, Armao argued that shifting regulation, blockchain adoption and advances in artificial intelligence are changing the value proposition in financial services.
The move follows a recent pullback in the cryptocurrency market. Bitcoin is down 30% from its October peak and is trading around $90,000.
In September, Galaxy bought Solana for about $306 million, extending its acquisition total to more than $1.5 billion.
Cointelegraph reached out to Galaxy for comment but did not receive a response by press time.
Related: Galaxy Senate Crypto Bill Risks Expanding Treasury Surveillance Authority
Galaxy Digital closes its first token CLO on Avalanche
Last week, Galaxy completed its first tokenized collateralized loan obligation (CLO), marking a step toward bringing private credit markets to the blockchain rails. The deal, called Galaxy CLO 2025-1, was issued by Avalanche and has so far raised approximately $75 million in loans, including $50 million in an institutional loan protocol from Grove in the Sky ecosystem.
The CLO supports Galaxy's crypto lending arm by buying a bitcoin- and ether-backed consumer loan from Arc Lending, with potential to expand to $200 million. The bonds are issued through INX, with Anchorage Digital Bank's oversight and real-time collateral tracking.
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