Galaxy brings a long/short fund to the market for crypto investors
Mike Novogratz’s Galaxy Digital is preparing to launch a $100 million crypto hedge fund designed to profit from both rising and falling cryptocurrency prices.
According to the Financial Times, the fund is set to start in the first quarter of 2026. It will be able to take long and short positions in digital assets, as well as in stocks of companies whose revenue depends on having Web3 financial infrastructure and on how quickly they integrate blockchain into business processes.
The capital allocation is expected to look like this: up to 30% will be deployed into cryptocurrencies, with the rest going into financial-sector equities that, in the team’s view, will be affected by new regulation and broader technological shifts.
It is also known that, at launch, Novogratz’s fund already has $100 million in commitments from family offices, high-net-worth investors, and some institutions. Galaxy plans to seed the fund as well, but it has not disclosed the amount.
The strategy will be led by Joe Armao. He believes the market is currently in a downturn, but remains confident in the outlook for Ethereum and Solana. He also says bitcoin’s role will hold, provided the Federal Reserve moves toward a more accommodative stance.
The launch does come at a moment when the crypto market has clearly cooled: bitcoin is down roughly 30% from its October peak and is trading around $90,000.
In his Financial Times interview, Armao also pointed to selloffs in the payments and data segment (citing Fiserv among his examples). He linked that move to the way valuations in financial services are being repriced under the pressure of regulation and an AI rally that continues to build momentum.
As a reminder, in December, Galaxy alongside State Street and Ondo announced the launch of the tokenized liquidity fund SWEEP, which is expected to go live on Solana in early 2026 and use public blockchain infrastructure for 24/7 management of “onchain cash.” Meanwhile, Galaxy’s head of banking, Zack Prince, says a new trend is about to emerge: $83.3 trillion in U.S. baby boomer wealth is expected to be passed to younger heirs, who may redirect that capital into crypto assets.
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