After the violent market turnaround, Galaxy aims to turn volatility into an opportunity. The group founded by Mike Novogratz is set to launch a $100 million hedge fund, capable of betting on both the rise and fall of digital assets and financial values exposed to the crypto revolution.
Assumed Long/Short Strategy
Unlike traditional directional funds, Galaxy’s new vehicle will adopt a flexible approach. Up to 30% of the portfolio can be directly invested in crypto tokens, while the rest will target shares of financial services companies impacted by blockchain technologies and regulatory frameworks.
The goal is clear: capture the winners of the ongoing transformation while exploiting the vulnerability of models destined to disappear. According to sources close to the matter, the fund has already secured $100 million from family offices, wealthy clients, and some institutional investors, with the possibility of increasing this amount at launch. Galaxy will also participate in the fund’s capital, without specifying the amount.
The End of ‘Up Only’?
The ‘up only’ phase of this cycle may be coming to an end.
The timing is crucial. The crypto market is experiencing a correction phase intensified by macroeconomic tensions, American trade threats, and a clear increase in risk aversion. Bitcoin has dropped another 5% this week, trading below $90,000.
For Joe Armao, the fund’s manager, the message is clear: the simplest phase of the cycle is likely behind us. This doesn’t imply a structural turnaround. The manager remains bullish on bitcoin and major blockchains like Ethereum or Solana, particularly in a scenario of further decreases in US interest rates.
The idea is not to abandon cryptos but to embrace a more complex market where selection and risk management regain centrality.
A Bet on Financial Disruption
Beyond tokens, Galaxy aims to exploit disruptions caused by tokenization, regulation, and artificial intelligence on traditional finance players. Banks, payment companies, financial software publishers, data and rating enterprises: all segments where valuations have been sharply corrected.
Some major payment companies lost nearly 50% last year, while data analytics groups plummeted 30% in a few months due to AI-related fears. Armao sees these movements as a profound transformation of the financial sector, creating a fertile ground for well-executed long/short strategies.
A Return to Galaxy’s Roots
This launch also marks a kind of return to origins. When Mike Novogratz created Galaxy nine years ago, the initial project was already a hedge fund. He eventually gave up, deeming the emotional and market context unsuitable.
Today, the situation is different. Galaxy manages nearly $17 billion in digital assets and generated $505 million in profits in the third quarter of 2025. The company believes it has the size, expertise, and perspective needed to navigate a market that has become tougher yet more mature.
In a cycle where volatility becomes the norm again, Galaxy bets that the ability to play both the rise and fall will make all the difference.
