Mike Novogratz's Galaxy will launch a $100 million venture capital fund

New proposal from Galaxy Digital

Galaxy Digital Holdings (TSX: GLXY), the cryptocurrency commercial bank headed by Mike Novogratz, is preparing to launch a new $100 million cryptocurrency hedge fund focused on generating superior returns through a multi-strategy approach across spot, derivatives, and DeFi markets.

This information, first reported by Bloomberg and confirmed through Galaxy's investor relations update on January 21, 2026, marks the launch of the company's most significant new fund since the peak of the 2021 bull market.

The fund — tentatively named Galaxy Alpha Fund — aims to raise $100 million in Q2 2026, with ambitions to scale to over $500 million in assets under management (AUM) within the next 12-18 months. The fund will function as a multi-strategy buy/short sell tool with a strong emphasis on highly liquid cryptocurrency assets, relative value trades, and event-driven opportunities.

What motivated them?

The $100 million target holds significant symbolic and strategic importance. This figure is large enough to effectively deploy diversified capital across spot, derivative, and yield markets, while also being disciplined enough to prioritize liquidity, risk control, and scalability. After years of volatility and high-profile fund crashes, institutional fund allocators are favoring carefully calculated fund sizes with clear missions.

Galaxy's decision to proceed on this scale reflects confidence that the current cryptocurrency market offers sufficient depth, tools, and regulatory clarity to support professional strategies.

Although full details have not been made public, Galaxy's platform reveals a multi-strategy approach to hedge funds. Areas of focus could include directional exposure to major assets like BTC and ETH, volatility and options strategies, relative value and arbitrage trading, and yield generation through staking and structured products.

Galaxy's structural advantages

Galaxy operates as a vertically integrated digital asset company, encompassing trading, lending, custody, asset management, and research. This gives their hedge fund access to abundant liquidity, proprietary cash flow insights, and institutional-level execution capabilities—advantages that remain crucial in the fragmented cryptocurrency market.

The launch reflects a broader evolution in the cryptocurrency finance sector. Capital is shifting away from highly leveraged speculation to disciplined, institutionally managed strategies. Hedge funds are becoming a core vehicle for expressing views on cryptocurrencies, much like how they operate in traditional macroeconomic, interest rate, and commodity markets.

Galaxy's move reinforces the idea that cryptocurrency is transforming into a long-term asset class, rather than a fleeting transaction.

Despite improved conditions, cryptocurrency hedge funds still face significant volatility, regulatory changes, and legal developments.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official stance of the platform. We recommend that readers conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCCVenture

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