Galaxy Digital, the digital asset firm founded by investor Mike Novogratz, is preparing to launch a new hedge fund with a strong focus on both cryptocurrencies and traditional financial services, according to a report by the Financial Times.
The fund, expected to debut in the first quarter, aims to raise $100 million and reflects Galaxy’s view that markets may be entering a more complex and selective phase after years of strong, broad-based rallies.
A blended investment approach
Under the proposed strategy, up to 30 percent of the fund’s assets will be allocated to cryptocurrencies. The remaining 70 percent will be invested in equities linked to traditional financial services, including firms affected by regulatory change, financial innovation, and emerging technologies.
The Financial Times reported that the fund has already secured $100 million in commitments from family offices, high-net-worth individuals, and a small group of institutional investors. Galaxy Digital confirmed it will provide seed capital for the fund, although it did not disclose the size of its investment.
Joe Armao, who will lead the fund, said the strategy is designed for a market environment where easy gains may be harder to find. Rather than relying on broad market momentum, the fund plans to focus on identifying companies likely to benefit or suffer from shifts in regulation and technology across the financial sector. These forces include the growing role of digital assets and the rapid adoption of artificial intelligence.
Building on Galaxy’s recent momentum
The fund launch follows an active period for Galaxy Digital, which was founded nine years ago and currently oversees about $17 billion in digital assets, according to the company’s website.
Galaxy reported a profit of $505 million for the third quarter of 2025, driven by gains across its asset management, trading, and investment banking businesses. The results came during a time of elevated market activity, particularly in digital assets.
The company has also continued to broaden its business lines as the crypto industry evolves. After Bitcoin’s fourth halving in April 2024, which reduced mining rewards from 6.25 bitcoin to 3.125 bitcoin per block, Galaxy took steps to diversify beyond mining.
In October 2025, the firm secured a $460 million strategic investment to convert part of its Texas-based mining operation into an artificial intelligence data center hub for CoreWeave. The move highlighted Galaxy’s efforts to tap into infrastructure opportunities linked to AI, a sector drawing increasing interest from investors.
More recently, Galaxy closed a $75 million tokenized collateralized loan obligation on the Avalanche blockchain. The transaction was structured to help finance consumer loans through Arch Lending and marked another step in the firm’s push to apply blockchain technology to traditional financial products.
Positioning for a changing market
The planned hedge fund underscores Galaxy Digital’s belief that future returns may depend less on overall market direction and more on careful selection. By combining exposure to cryptocurrencies with investments in established financial services firms, the strategy aims to capture opportunities created by disruption while managing risk across different asset classes.
As digital assets continue to mature and intersect with mainstream finance, Galaxy’s latest move suggests the firm sees value in bridging both worlds rather than betting on one alone.
