Mike Novogratz’s digital assets company Galaxy is preparing to launch a $100 million hedge fund aimed at profiting from both rising and falling cryptocurrency prices.
The fund’s launch is scheduled for the first quarter, and its structure will enable long and low positions in digital assets and time-honored shares related to financial infrastructure, reports the Financial Times. reported on Wednesday.
The report shows that up to 30% of the fund’s capital will be allocated directly to crypto tokens, with the remainder deployed in shares of financial services companies, which are expected to be shaped by digital asset regulations, blockchain adoption and technological changes.
The fund has already secured $100 million in commitments from family offices, high-net-worth individuals and selected institutional investors, although the firm may open up the strategy with additional capital. Galaxy reportedly confirmed to the FT that it would make a seed investment, but declined to disclose the amount.
Related: Wealth transfer could boost cryptocurrency adoption among younger investors: Galaxy exec
The “only up” phase of cryptocurrencies is coming to an end
Joe Armao, who will lead the modern fund, said the market is entering a different phase. “Only the upside part of this cycle is potentially coming to an end,” he told the outlet, maintaining a positive stance on major assets such as Ethereum (ETH) and Solana (SOL). Armao added that Bitcoin (BTC) remains relevant in an environment shaped by potential U.S. Federal Reserve interest rate cuts, provided stocks and gold remain resilient.
In addition to cryptocurrency companies, Galaxy is also keeping an eye on time-honored players. Armao cited sell-offs at payments and data companies such as Fiserv, arguing that changing regulations, the adoption of blockchain technology and advances in artificial intelligence are changing financial services valuations.
This move follows the recent collapse in the cryptocurrency market. Bitcoin is down about 30% from its October peak and is trading near $90,000.
In September, Galaxy bought Solana for about $306 million, extending a buying spree that has totaled more than $1.5 billion.
Cointelegraph reached out to Galaxy for comment but did not receive a response via publication.
Related: Galaxy claims that the Senate bill on cryptography threatens to expand fiscal oversight authority
Galaxy Digital Closes First Tokenized CLO on Avalanche Platform
Last week, Galaxy finalized its first tokenized loan obligation (CLO), a step towards bringing private credit markets to the blockchain. The transaction, called Galaxy CLO 2025-1, was executed on the Avalanche platform and has funded approximately $75 million in loans to date, driven by a $50 million allocation from Grove, the institutional lending protocol in the Sky ecosystem.
The CLO is backing Galaxy’s cryptocurrency division by purchasing overcollateralized Bitcoin and Ether-backed consumer loans from Arch Lending, with the option to expand to $200 million. The bonds were issued and tokenized via INX, and real-time security custody and tracking was handled by Anchorage Digital Bank.
Warehouse: Bitget’s Gracy Chen is looking for “entrepreneurs, not wannabe entrepreneurs”