Galaxy to launch $100M hedge fund to bet on rising and falling crypto prices

Mike Novogratzs digital asset firm Galaxy is preparing to launch a $100 million hedge fund aimed at profiting from both rising and falling crypto prices.

The fund is set to launch in the first quarter and will be structured to take long and short positions across digital assets and traditional equities tied to financial infrastructure, the Financial Times reported on Wednesday.

Up to 30% of the funds capital will be allocated directly to crypto tokens, with the remainder deployed into financial services stocks expected to be shaped by digital asset regulation, blockchain adoption, and technological change, per the report.

The fund has already secured $100 million in commitments from family offices, high-net-worth individuals and select institutional investors, though the company may open the strategy with additional capital. Galaxy reportedly confirmed to the FT that it will make a seed investment but declined to disclose the amount.

Related: Wealth transfer may boost crypto adoption among younger investors: Galaxy exec

Cryptos “up-only” phase is ending

Joe Armao, who will lead the new fund, said the market is entering a different phase. “The up only part of this cycle is potentially coming to an end,” he told the outlet, while maintaining a positive outlook on major assets such as Ethereum (ETH) and Solana (SOL). Armao added that Bitcoin (BTC) remains relevant in an environment shaped by potential US Federal Reserve rate cuts, provided equities and gold remain resilient.

Beyond crypto-native firms, Galaxy is also watching traditional players. Armao cited sell-offs in payments and data companies such as Fiserv, arguing that shifting regulation, blockchain adoption and advances in artificial intelligence are changing valuations across financial services.

The move follows a recent pullback in the cryptocurrency market. Bitcoin has fallen around 30% from its October peak and is trading near $90,000.

Bitcoin is down 12% over the past year. Source: CoinMarketCap

In September, Galaxy bought around $306 million worth of Solana, extending a buying spree totaling more than $1.5 billion.

Cointelegraph reached out to Galaxy for comment but had not received a response by publication.

Related: Galaxy says Senate crypto bill risks expanding Treasury surveillance authority

Galaxy Digital closes first tokenized CLO on Avalanche

Last week, Galaxy completed its first tokenized collateralized loan obligation (CLO), marking a step toward bringing private credit markets onto blockchain rails. The deal, called Galaxy CLO 2025-1, was issued on Avalanche and has financed about $75 million in loans to date, anchored by a $50 million allocation from Grove, an institutional credit protocol within the Sky ecosystem.

The CLO supports Galaxys crypto lending arm by purchasing overcollateralized Bitcoin and Ether-backed consumer loans originated by Arch Lending, with capacity to expand to $200 million. The bonds were issued and tokenized via INX, with custody and real-time collateral tracking handled by Anchorage Digital Bank.