Galaxy will launch a $100 million cryptocurrency hedge fund

Source: PortaldoBitcoin Original Title: Galaxy to Launch $100 Million Cryptocurrency Hedge Fund Original Link: The Galaxy company, founded by entrepreneur and crypto sector billionaire Mike Novogratz, will launch a $100 million hedge fund in the first quarter of this year, adopting both long and short positions, as Bitcoin retreats from its October peak and trade tensions shake the crypto market.

The fund will invest up to 30% of its assets in cryptocurrency tokens, with the remainder allocated to shares of financial services companies that, according to Galaxy, will be impacted by changes in digital asset technologies and regulations.

The digital asset infrastructure company has already received $100 million in investments from family offices, high-net-worth investors, and some larger institutions, although the launch may occur with even greater commitments.

Paul Howard, senior director at crypto trading firm Wincent, said that the combination of tokens and financial services stocks in the fund reflects where alpha is emerging, with returns driven by “bringing financial services into blockchain and digital assets into traditional businesses.”

He added that betting “on a smaller number of proven crypto tokens and partnerships,” many of which are related to real-world use cases such as stablecoins or tokenized assets, offers investors a more cautious approach than a dispersed one.

The hedge fund signals a strategic shift for Galaxy as volatility returns to digital asset markets.

Bitcoin is currently trading around $88,625, down 2.5% for the day and 6.7% for the week, according to CoinGecko data.

Crypto Market Fluctuates

The fund’s head, Joe Armao, said that the “‘only up’ phase of this cycle may be coming to an end,” although he remains optimistic about Bitcoin and leading cryptos like Ethereum (ETH) and Solana (SOL).

“Bitcoin cannot be ignored this year in a scenario of new interest rate cuts by the Federal Reserve, assuming stock markets and gold remain healthy,” he stated.

Bitcoin fell from $95,000 on Friday after Donald Trump threatened to impose 10% tariffs on eight European countries opposing US control over Greenland, with measures set to take effect on February 1 and escalate to 25% by June 1.

Europe responded quickly, signaling retaliation, with the European Parliament now considering suspending approval of the US-EU trade agreement signed in July.

Novogratz tweeted Tuesday that the current Bitcoin price is “disappointing, as it still faces selling pressure,” adding that it needs to recover to between $100,000 and $103,000 to resume an upward trend. “I believe it will succeed over time,” he concluded. In July last year, he predicted Bitcoin could reach $150,000 by 2025, a forecast that did not materialize, as the cryptocurrency hit a peak of $126,080 in October.

QCP Capital highlighted in its latest report that Bitcoin “is behaving like a high-beta risk asset, very sensitive to interest rates, geopolitics, and cross-market volatility,” adding that, “instead of acting as a hedge,” crypto should remain “reactive and non-directional” until clearer policy signals emerge.

In this context, institutional Bitcoin buyers continue accumulating, while Michael Saylor of Strategy made one of his largest purchases in nearly a year on Tuesday, acquiring 22,300 Bitcoin for $2.1 billion, despite the asset’s volatility.

Armao said Galaxy’s fund could profit by identifying “winning and losing companies,” noting that “it is possible to explore themes of disruption, gains, and losses across the financial services sector.”