Galaxy Digital, the digital asset investment firm led by Mike Novogratz, is launching a $100 million hedge fund designed to capitalize on market volatility in the cryptocurrency and fintech sectors. The fund will begin operations in the first quarter of 2026, according to reporting from Coindesk.
The new hedge fund will employ both long and short positions, allowing the firm to profit from rising and falling asset prices.
Approximately 30% of the fund’s capital will be allocated to cryptocurrency tokens, while the remaining 70% will target financial services stocks that Galaxy believes are being transformed by digital asset technologies and regulatory changes.
Joe Armao, the fund’s manager, told the Financial Times that structural market shifts present an optimal investment opportunity. He cited potential Federal Reserve interest-rate cuts and expanding cryptocurrency adoption as key factors influencing the fund’s strategy.
Galaxy Digital has already secured backing from family offices, high-net-worth individuals, and institutions to support the fund’s launch. The firm is also seeding the fund with an undisclosed amount of its own capital, demonstrating confidence in the investment thesis.
Nearly a decade ago, Novogratz initially conceived Galaxy as a hedge fund before redirecting the company toward asset management operations. The firm now oversees $17 billion in assets under management.
Galaxy Digital’s strong financial performance also supports the expansion as the company has now generated over $500 million in profit during the third quarter of 2025, showing its robust profitability across its operations.
Beyond hedge fund operations, Galaxy Digital continues expanding its infrastructure capabilities. The firm recently secured approval from Texas’ electric grid operator ERCOT to add 830 megawatts of power capacity to its Helios data center campus in West Texas. The approval followed completion of a required large-load interconnection study.
Elsewhere, the company’s stock performance has faced headwinds, with Galaxy Digital shares declining more than 6.4% on Tuesday amid broader market volatility. Despite the short-term stock movement, the firm’s strategic initiatives suggest continued expansion across multiple business segments.
Novogratz has demonstrated a consistent ability to adjust Galaxy Digital’s strategy based on evolving market conditions and opportunities. The new hedge fund launch aligns with the firm’s pattern of diversifying its business model to capture value across different market environments.
The $100 million hedge fund entry expands Galaxy Digital’s product offerings at a time when institutional and retail investors seek exposure to crypto and fintech sectors. Now, its dual long-short structure provides investors with a hedged approach to participate in the digital asset market.
See also: The Top 7 Crypto Hedge Fund Companies for Investors
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