Galaxy plans $100M hedge fund as Bitcoin markets weaken

Highlights

The $100 million hedge fund is set to launch in the first quarter of 2026 and will be able to take both long and short positions.
Galaxy raised capital for the fund from wealthy investors and family offices, while Mike Novogratz also invested an undisclosed amount.
The hedge fund signals a strategic shift for Galaxy as volatility returns to digital asset markets.

According to the Financial Times, Galaxy, owned by crypto entrepreneur and billionaire Mike Novogratz, plans to launch a $100 million hedge fund in the first quarter of the year. The fund will take both long and short positions as bitcoin falls from its October peak and trade tensions unsettle crypto markets.

The new hedge fund plans to allocate up to 30% of its assets to crypto tokens, with the remainder invested in shares of financial companies that Galaxy believes will be affected by technological and regulatory changes related to digital assets.

Paul Howard, senior director at crypto trading firm Wincent, told Decrypt that combining tokens and financial equities in the fund’s portfolio reflects a broader trend toward alpha generation driven by “the integration of blockchain-based financial services and digital assets into traditional businesses.”

He added that backing “a small number of crypto tokens with proven traction and partnerships,” many of which are tied to real-world use cases such as stablecoins or tokenized assets, offers investors a more prudent path than a fragmented investment approach.

Galaxy signals readiness for change

The creation of the new fund also reflects a shift in Mike Novogratz’s own outlook, which he has publicly acknowledged. On Tuesday, Novogratz wrote on X that bitcoin’s current price is “disappointing as it continues to face selling pressure,” adding that it needs to reclaim the $100,000–$103,000 range to resume an upward trend.

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“I think it will happen over time,” Novogratz added.

In its latest report, QCP Capital noted that bitcoin is “trading like a high-beta risk asset, highly sensitive to interest rates, geopolitics, and cross-market volatility,” adding that rather than acting as a hedge, the cryptocurrency is likely to remain “reactive rather than directional” until clearer policy signals emerge.

Against this backdrop, corporate bitcoin buyers continue to accumulate the asset. On Tuesday, Michael Saylor’s Strategy made one of its largest purchases in nearly a year, acquiring 22,300 BTC for $2.1 billion despite price volatility.

Bitcoin is currently trading around $87,870, down nearly 2% on the day and 9.3% over the past week, according to CoinMarketCap data.

As we wrote, Galaxy Digital secures $460M investment to expand Texas AI data center

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