Novogratz’s Galaxy to launch $100mn crypto hedge fund
Billionaire’s firm plans portfolio to profit from rising and falling prices, following sharp sell-off in digital assets sector
US billionaire Mike Novogratz’s cryptocurrency group Galaxy is planning to launch a $100mn hedge fund, as it seeks to profit in a digital assets sector that has recently suffered a sharp sell-off.
Galaxy, which oversees $17bn worth of digital assets, said the new fund will launch in the first quarter of this year and be able to bet on rising and falling prices. It will invest up to 30 per cent of its assets in crypto tokens and the rest in financial services stocks that it believes will be affected by changes in digital asset technologies and laws.
It has received $100mn in investment from family offices, high-net-worth investors and some larger institutions, according to people familiar with the matter, but may launch with more commitments. Galaxy said it is making a seed investment in the fund but declined to say how much.
The launch comes after a 28 per cent fall in the price of bitcoin, the world’s biggest cryptocurrency, since its peak in October. That leaves it well below where it stood when Donald Trump, who has vowed to make the US the “crypto capital of the world”, became US president in January last year.
The price of bitcoin has dropped 5 per cent this week and is trading around $90,000 after Trump threatened to slap tariffs on European countries that do not support his seizure of Greenland.
“The ‘up only’ phase of this cycle is potentially coming to an end,” Joe Armao, head of the fund, told the FT, but added that he remains bullish on bitcoin and other major cryptocurrencies such as ETH and Solana.
Bitcoin “can’t be ignored this year in a backdrop of further [Federal Reserve interest rate] cuts, assuming equity markets and gold stay healthy”, he said.
Novogratz launched Galaxy, which runs crypto investment banking and asset management businesses, nine years ago. He had initially planned it as a hedge fund but later changed tack, blaming market conditions and saying at the time that “emotionally, it didn’t feel right”. The firm made $505mn in profits in the third quarter of 2025.
Armao said the fund can profit from finding “winning and losing companies”, adding that “you can play disrupters, winning and losing themes across financial services”.
A slew of crypto companies including stablecoin issuer Circle and exchange Gemini went public last year, while globally hundreds of so-called digital asset treasury companies listed.
Armao also pointed to banks, payment companies, financial software and other financial services groups that he said will potentially be disrupted by digital asset technologies and rules, as well as the impact of AI.
“There are major payments companies [such as] Fiserv down 50 per cent last year . . . data and analytics and ratings companies that have sold off 30 per cent in a quarter on AI fear. The whole sector is undergoing meaningful change and you’re seeing that in stock prices,” Armao said.