Galaxy Digital To Launch $100 Million Hedge Fund to Trade the Crypto Market

• Galaxy Digital is planning to launch a $100 million fund to trade both crypto and fintech stocks.
• The new strategy will allow the firm to profit from both rising and falling prices within the crypto market.
• Only 30% of the fund will go into tokens, while 70% will be used to target financial services equities.

The crypto space is changing fast, and the “up-only” phase of the market seems to be fading now.

Mike Novogratz and his firm, Galaxy Digital have responded to this with a new investment vehicle worth $100 million.

This multi-million dollar hedge fund will be used to handle the market’s current turbulence by betting on both sides of the market, so as to profit regardless of where the price goes.

Galaxy Digital Enters With Long-Short Fund

The upcoming fund is expected to go live in the first quarter of this year. It is also expected to be unlike traditional “long-only” funds, which make money only when prices go up. 

This means the team can profit if a crypto or stock price drops. Joe Armao has been tapped to lead the fund, and he believes the market is entering a new era in which holding assets alone is no longer enough.

Galaxy Digital is making structure a very important part of this new approach. The firm is planning to put about 30% of the capital directly into crypto tokens like Ethereum and Solana. The remaining 70% will go toward traditional stocks in the financial space. 

Why Galaxy Digital Is Moving Into Fintech Stocks

Alongside crypto-native companies, they are also watching traditional giants like Fiserv. Armao noted that breakthroughs in AI and changing rules in the US are affecting how these companies are valued. 

The firm hopes that by mixing tokens with stocks, it can capture profit across the entire industry.

This move comes as Bitcoin has seen some recent struggles. The price fell about 30% from its peak last October. It currently sits near the $90,000 level, and Galaxy Digital is doing this because the market is so volatile. 

The firm sees a chance to win, even when the general market feels weak. They are thus betting that their experience in both old and new finance will give them an advantage.

The fund has already attracted a great deal of interest, where family offices and wealthy investors have committed $100 million so far. Galaxy Digital will also put its own money into the fund as a seed investment. 

Expanding the Galaxy Digital Ecosystem

More than the new hedge fund, the company is busy building other parts of its business. 

Last week, they finished their first tokenised collateralised loan obligation. This was done on the Avalanche blockchain and it shows how the firm is trying to bring private credit markets into the digital space. 

So far, the deal has already financed around $75 million in loans.

They are also expanding their physical presence, having recently received approval to add more power to their Helios data centre in West Texas. This facility is a massive hub for mining and high-performance computing, and it gives them the energy they need to support AI and blockchain.

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