Galaxy Digital Launches $100M Hedge Fund for Two-Way Crypto Markets

This article was first published on The Bit Journal.

Galaxy Digital hedge fund is preparing to launch a $100 million investment fund that will aim to profit from both rising and falling cryptocurrency prices. The fund is expected to start in the first quarter and marks a shift as the up-only period for crypto seems to be ending.

It will invest in crypto tokens as well as financial stocks connected to blockchain and digital asset technology. The strategy is designed to manage risk and navigate a market environment that is becoming more complex.

What Is the Galaxy Digital Hedge Fund Launch About?

The Galaxy Digital hedge fund will put up to 30% of its money into crypto tokens, while the rest will go into traditional financial stocks expected to gain from new regulations, blockchain adoption, and technology changes. The fund has already secured $100 million in commitments from family offices, wealthy individuals, and selected institutional investors.

Galaxy Digital will also invest some seed money, though the exact amount has not been shared. Joe Armao, who will lead the fund, said the market is moving into a different phase.

Joe Armao said this while staying positive on key assets like Ethereum and Solana.

Bitcoin is trading around $89,185 after dropping about 30% from its October peak and falling roughly 12% over the past year. Armao added that BTC remains important, as long as equities and gold stay steady amid possible U.S. Federal Reserve rate cuts.

Why Is Galaxy Digital Shifting Its Strategy?

Galaxy Digital hedge fund shows how both crypto and traditional markets are changing. Armao pointed out sell-offs in financial services companies like Fiserv, saying that new regulations, blockchain adoption, and advances in AI are affecting company values across the sector.

By investing in both crypto assets and stocks, the fund aims to take advantage of technological changes while managing market ups and downs. This approach is different from traditional crypto strategies that only bet on prices going up.

How Will the Fund Operate?

The fund is designed to take both long and short positions, allowing it to make profits from rising and falling prices. This makes Galaxy Digital hedge fund different from regular crypto investment strategies, with a focus on managing risk. The company’s past purchases show this strategy in action.

In September 2025, Galaxy bought about $306 million worth of Solana, continuing a buying spree that has totaled more than $1.5 billion. The company has not publicly shared further details about the fund’s operations, highlighting its reserved approach to communication.

How Does Galaxy’s Blockchain Innovation Support the Hedge Fund?

Galaxy Digital recently completed its first tokenized collateralized loan obligation (CLO), called Galaxy CLO 2025-1, on Avalanche. The structure has financed about $75 million in loans, supported by a $50 million allocation from Grove, an institutional credit protocol. 

The CLO also has the ability to expand to $200 million. Overcollateralized consumer loans backed by Bitcoin and Ether, originated by Arch Lending, are purchased through the CLO.

Bonds are issued through INX, and custody with real-time collateral tracking is managed by Anchorage Digital Bank. This combination of crypto lending, tokenization, and traditional finance supports the Galaxy Digital hedge fund’s dual-market strategy, providing diversified exposure while managing risk.

What Does This Mean for the Market?

Analysts see Galaxy Digital hedge fund as a sign that the crypto sector is becoming more mature. Its dual-market strategy lets institutional investors take part in crypto opportunities while reducing volatility through traditional stocks.

The fund also shows how blockchain and regular finance are coming together. By investing in both rising and falling markets, Galaxy Digital hedge fund represents a more risk-aware approach that aligns with new regulations, technology adoption, and changing market conditions.

Conclusion 

Galaxy Digital hedge fund represents a deliberate and calculated shift in crypto investing. By combining long and short positions across digital assets and financial infrastructure stocks, the fund is structured to navigate the end of the up-only cycle while capturing opportunities created by regulation, blockchain adoption, and technological innovation.

With $100 million in initial commitments, a series of strategic crypto purchases, and blockchain-backed lending initiatives with the capacity to expand to $200 million, Galaxy Digital hedge fund positions itself as a key benchmark for institutional engagement in digital assets.

Glossary 

Crypto Tokens: Digital coins like Bitcoin, Ethereum, or Solana used for investment.

Financial Stocks: Shares in companies linked to blockchain or finance technology.

Collateralized Loan Obligation: A pool of loans split into bonds for investors.

Seed Investment: Initial money the fund puts in to start the strategy.

Dual-Market Strategy: Investing in both crypto and stocks to reduce risk.

Frequently Asked Questions About Galaxy Digital Hedge Fund

When will the Galaxy Digital Hedge fund start?

The $100 million investment fund is expected to launch in the first quarter of the year.

What other investments will the fund make?

The rest of the fund will be invested in financial stocks related to blockchain, technology, and new regulations.

How will the fund make money?

The fund will take both long and short positions, which means it can profit from both rising and falling prices.

Why is Galaxy Digital using this strategy?

Galaxy Digital is using this strategy to manage risk and benefit from changes in technology, blockchain adoption, and regulations.

Who has already invested in the fund?

Family offices, wealthy individuals, and selected institutional investors have already committed $100 million to the fund.

Sources

Cointelegraph

Financialtimes

Coingape

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