Key Highlights
- Galaxy Digital launches a $100M hedge fund, blending crypto tokens and financial stocks amid Bitcoin’s recent slump.
- The hedge fund aims to spot “winning and losing companies,” keeping 30% in crypto while balancing risk with traditional stocks.
- Galaxy explores prediction markets, providing liquidity to stabilize prices and expand influence beyond traditional crypto investing.
Billionaire Mike Novogratz’s Galaxy Digital is preparing to launch a $100 million hedge fund targeting crypto tokens and financial services stocks. The fund will invest up to 30% of its capital in cryptocurrency tokens, while allocating the remaining 70% to financial services stocks.
According to a Financial Times report, Galaxy plans to invest in companies likely impacted by digital asset technologies and new regulations. The fund’s launch comes as Bitcoin has dropped about 29% from its October 2025 all-time high of $126,198. At the time of writing, as per CoinMarketCap data, Bitcoin (BTC) was trading at $89,226.56, down 2.15% in the last 24 hours, with a trading volume of $51.39 billion.
Joe Armao, head of the fund, emphasized that Galaxy Digital remains optimistic on Bitcoin, Ethereum, and Solana despite the downturn. “We aim to identify winning and losing companies,” he said, though he did not specify which tokens the hedge fund will buy.
Galaxy Digital will also make a seed investment, but the exact size remains undisclosed. Sources told FT that the fund has already attracted family offices, high-net-worth investors, and larger institutions, with additional commitments expected before the official launch.
Hedge fund strategy and market position
The fund mixes crypto investments with regular financial stocks, creating a “best of both worlds” approach. Besides buying crypto, Galaxy believes companies connected to digital assets could also gain. This strategy sets it apart from funds that only focus on crypto, helping balance potential rewards with lower risk.
However, there is scepticism about calling it a “crypto” fund. Jacob King, CEO of SwanDesk, wrote on X, “How are you going to call it a crypto fund when most of the holdings are NOT in crypto tokens?” He pointed to past controversies, like Galaxy’s role with LUNA, and warned investors to be cautious of hype-driven schemes.
Nevertheless, Galaxy has demonstrated transparency in managing large crypto positions. Last month, the firm moved 900 BTC, valued at $81.59 million, to a new wallet, confirmed by blockchain tracker Lookonchain. Additionally, Galaxy executed an 80,000 BTC sale earlier this year for a Satoshi-era investor, described as part of the client’s real estate planning. These moves indicate active portfolio management and ongoing market influence.
Exploring prediction markets
Beyond its hedge fund work, Galaxy is also exploring prediction markets, working with platforms like Polymarket and Kalshi Inc. Novogratz noted, “We’ve been doing some small-scale experimenting with market-making on prediction markets.”
If the effort grows, the firm could help keep markets active by constantly posting buy and sell orders, which stabilizes prices and draws in more users. Moreover, this liquidity support can build trust in these new markets and strengthen Galaxy’s overall presence.
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