Novogratz Bets Big: Galaxy Launches $100M Hedge Fund in Tumultuous Crypto Market
Billionaire crypto entrepreneur Mike Novogratz is making waves again. His firm Galaxy is launching a $100 million hedge fund in Q1 2026, designed to navigate turbulent crypto markets with both long and short positions. The move comes as Bitcoin slides from its October highs and escalating U.S.-EU trade tensions rattle global markets.
The fund will allocate up to 30% of its assets in crypto tokens, with the remainder invested in financial services stocks that Galaxy predicts will be affected by digital asset technology adoption and regulatory changes. Early seed investments come from family offices, high-net-worth individuals, and select institutions, totaling $100 million, though Galaxy may secure more capital before launch.
A Strategic Hedge in a Volatile Market
Paul Howard, senior director at Wincent, explained the fund’s dual focus:
“By backing a smaller set of crypto tokens tied to real-world use cases like stablecoins or tokenized assets, and pairing them with financial services stocks going on-chain, the fund targets the emerging alpha in the market.”
Joe Armao, heading the new fund, described the pivot:
“The 'up only' phase of this cycle is potentially ending, but we remain bullish on Bitcoin, Ethereum, and Solana.”
The fund is built to capitalize on both winning and losing themes in crypto and finance, giving investors a prudent, flexible approach in unpredictable markets.
Bitcoin Faces Headwinds
Bitcoin is currently trading around $88,375, down 3.1% on the day and 7.1% over the past week, following threats by President Trump to impose tariffs on eight European countries over Greenland. European lawmakers have quickly signaled retaliation, with potential suspension of the U.S.-EU trade deal agreed last July.
Novogratz acknowledged the challenges:
“Bitcoin’s current price is disappointing as it is still being met with selling. It needs to reclaim $100K–$103K to regain its upward trend. I think it will in time.”
Despite this, corporate accumulation continues, exemplified by Michael Saylor’s $2.1 billion purchase of 22,300 BTC, highlighting ongoing institutional confidence in the digital asset.
Analysts at QCP Capital note that Bitcoin behaves like a high-beta risk asset, highly sensitive to interest rates, geopolitical events, and market volatility, meaning it may remain reactive until clearer policy signals emerge.
Galaxy’s hedge fund aims to profit from this very uncertainty, playing both disrupters and laggards in crypto and finance—a strategy built for a world where digital assets and traditional markets increasingly intersect.
Bottom Line:
In a market roiled by geopolitics, trade wars, and Bitcoin’s fluctuations, Galaxy’s new hedge fund represents strategic agility. By combining crypto tokens with financial stocks, Novogratz is positioning investors to profit from both the winners and losers in the evolving digital economy.