USDGalaxy Digital to Launch $100 Million Crypto and Fintech Hedge Fund Amid Bitcoin’s 28% Pullback
New Galaxy Fund Targets Long and Short Bets Across Crypto Tokens and Financial Services Stocks
TL;DR
- Galaxy Digital plans to launch a $100 million hedge fund in Q1 2026, allocating up to 30% to crypto tokens and the rest to financial services equities.
- Bitcoin was down about 28% from its October peak and trading around $87,000–$90,000 at the time of reporting.
- Galaxy manages roughly $17 billion in digital assets and reported a $505 million profit in Q3 2025.
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Galaxy Digital, the digital-asset firm founded by billionaire Mike Novogratz, is preparing to launch a $100 million hedge fund focused on cryptocurrency markets and financial technology stocks, with a planned debut in the first quarter of 2026. The fund is designed to take both long and short positions across crypto tokens and publicly traded financial services companies, according to reporting published on January 21, 2026.
The launch comes during a period of market weakness, with Bitcoin trading roughly 28% below its October 2025 peak and changing hands in the $87,000 to $90,000 range at the time of publication. Market data cited alongside the announcement showed Bitcoin at about $87,298, down 3.26% over 24 hours, while Ether traded near $2,872.27, down 4.74%, and Solana around $125.78, down 1.28%.
Up to 30% of the $100 million fund is expected to be allocated directly to crypto tokens, while the remaining roughly 70% will be deployed into financial services and fintech-related equities affected by digital asset adoption, regulatory shifts, and technological change. The strategy allows the fund to seek returns in both rising and falling markets through directional and relative-value trades.
The hedge fund will be led by Joe Armao, a portfolio manager at Galaxy, who described the market environment as one where two-way strategies are becoming more relevant. “You can play disrupters, winning and losing themes across financial services,” Armao said, referring to opportunities across traditional finance firms and newer technology-driven competitors.
Armao also said market conditions have changed materially from earlier crypto cycles. “The up only phase is potentially coming to an end,” he said, while adding that he remains constructive on major digital assets, including Bitcoin, Ether, and Solana, citing expectations around interest rate policy and institutional participation.
Galaxy Digital is expected to seed the fund with its own capital, though the firm has not disclosed the size of its internal commitment. The remaining capital has been raised from a mix of family offices, high-net-worth individuals, and institutional investors, bringing total commitments to $100 million ahead of the launch.
The firm currently manages about $17 billion in digital assets across its trading, asset management, and investment banking businesses. Galaxy reported a profit of $505 million in the third quarter of 2025, according to previously disclosed financial results.
Galaxy was founded roughly nine years ago, with Novogratz originally envisioning the company as a hedge fund before expanding into a broader digital-asset financial services platform. The new hedge fund represents a return to that original concept, adapted to a market where crypto assets, fintech stocks, and traditional financial firms are increasingly intertwined.
The fund’s launch follows a broader wave of institutional activity in digital assets, including public listings by crypto-related companies such as Circle and Gemini, developments that have reshaped the landscape in which Galaxy operates as it prepares to roll out the new vehicle in early 2026.
This article has been refined and enhanced by ChatGPT.
