The digital asset firm Galaxy, led by Mike Novogratz, is preparing the launch of a Galaxy 100 million hedge fund during this first quarter of 2026. According to the Financial Times, this new strategy seeks to generate returns in both upward and downward scenarios, adapting to a volatile financial environment where the linear growth phase seems to be coming to a definitive and clear end.
Under the leadership of Joe Armao, the fund will employ a hybrid structure combining positions in digital assets with traditional financial stocks. By allocating up to 30% of capital directly to tokens, the firm intends to leverage price inefficiencies in cryptocurrencies globally, while the remainder will be deployed in financial services stocks that may be affected by the adoption of blockchain technology during this active year.
Likewise, the fund already has capital commitments from family offices and high-net-worth institutional investors recently. Galaxy confirmed it will make its own seed investment to support this new alternative investment thesis, which arises at a time when Bitcoin trades near 90,000 dollars, reflecting a necessary maturation in management strategies for modern digital assets in the current market.
The end of the uninterrupted bullish phase and the rotation toward active management
On the other hand, Joe Armao maintains that the stage of easy and constant gains in the crypto sector is concluding to give way to greater complexity. Because valuations of payment companies like Fiserv are changing due to artificial intelligence, the fund will seek to identify winners and losers in the services sector, using an investment approach that prioritizes operational agility over passive accumulation of assets today.
Nonetheless, the firm maintains a positive outlook on major networks such as Ethereum and Solana, despite the recent retreat of the overall market. Bitcoin’s ability to resist will depend on the resilience of equities and gold, especially in a context of potential rate cuts by the Federal Reserve, which forces investors to seek risk-adjusted returns in a highly competitive and shifting environment.
In addition to this, Galaxy has demonstrated its technical capability by recently closing its first tokenized collateralized loan obligation on the Avalanche network. By funding loans backed by digital assets using smart contract technology, the company is leading the convergence between private credit and the chain, setting an important precedent for transparency and efficiency in global financial markets during this year.
Will the short-selling strategy manage to protect capital against further declines?
Therefore, the possibility of taking short positions is presented as a vital protection tool in an uncertain market cycle. In this way, Galaxy aims to mitigate losses during severe market corrections, allowing its investors to benefit from volatility instead of being victims of it, which is essential to attract long-term institutional capital and large-scale funding for the project.
Furthermore, real-time monitoring of collateral and custody secured by Anchorage Digital Bank reinforce the security of these new financial structures. The goal is to create an investment vehicle combining cryptographic innovation with the rigor of traditional markets, ensuring the fund can successfully navigate the anticipated regulatory changes for this year in today’s active United States territory.
Finally, this fund is expected to act as a bridge for those investors desiring exposure to the sector without suffering one-way volatility. Hence, Galaxy’s evolution will depend on its ability to execute complex trades in a highly fragmented market, consolidating its position as a dominant player in digital asset management and tokenized finance at a global and institutional level.
