Mike Novogratz's digital asset company Galaxy is preparing to launch a $100 million hedge fund that goals to learn from each rising and falling crypto prices.
The fund is predicted to launch in the primary quarter and might be structured to take long and short positions in digital assets and traditional stocks tied to financial infrastructure, the Financial Times reported on Wednesday.
According to the report, as much as 30% of the fund's capital might be invested directly in crypto tokens, with the rest invested in financial services stocks which are expected to be influenced by digital asset regulation, blockchain adoption and technological change.
The fund has already secured $100 million in commitments from family offices, high net value individuals and choose institutional investors, although the firm may launch the strategy with additional capital. Galaxy confirmed to the FT that it can make a seed investment, but declined to reveal the quantity.
Crypto’s “up-only” phase is coming to an end
Joe Armao, who will lead the brand new fund, said the market is entering a special phase. “The 'only rising' a part of this cycle could also be coming to an end,” he told the outlet, while maintaining a positive outlook on key assets reminiscent of Ethereum (ETH) and Solana (SOL). Armao added that Bitcoin (BTC) stays relevant in an environment dominated by possible rate of interest cuts from the Federal Reserve, provided stocks and gold remain resilient.
In addition to crypto-native firms, Galaxy can also be eyeing traditional players. Armao pointed to selloffs in payments and data firms like Fiserv, arguing that changing regulation, blockchain adoption and advances in artificial intelligence are changing valuations in financial services.
The move follows a recent decline within the cryptocurrency market. Bitcoin is down about 30% since its peak in October and is trading at around $90,000.
Bitcoin has fallen 12% within the last yr. Source: CoinMarketCap
In September, Galaxy bought Solana value around $306 million, continuing its buying spree to a complete of greater than $1.5 billion.
Cointelegraph reached out to Galaxy for comment but didn’t receive a response by publication time.
Galaxy Digital completes the primary tokenized CLO for Avalanche
Last week, Galaxy accomplished its first tokenized collateralized loan obligation (CLO), marking a step toward bringing private credit markets onto the blockchain track. The deal, called Galaxy CLO 2025-1, was published on Avalanche and has funded around $75 million in loans up to now, anchored by a $50 million allocation from Grove, an institutional lending protocol throughout the Sky ecosystem.
The CLO supports Galaxy's crypto lending division by purchasing overcollateralized Bitcoin and Ether-backed consumer loans from Arch Lending, which may expand to $200 million in capability. The bonds were issued and tokenized through INX, with real-time custody and collateral tracking handled by Anchorage Digital Bank.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph's editorial guidelines and goals to offer accurate and up-to-date information. Readers are advised to independently confirm the data. Read our editorial policies https://cointelegraph.com/editorial-policy
