Galaxy Digital plans to launch a $100 million hedge fund in the first quarter of 2026 that will use long‑short strategies to profit from both rallies and downturns in digital‑asset markets. The hybrid vehicle will split capital between direct crypto tokens and financial‑services equities.
The fund is designed to appeal to institutional and high‑net‑worth investors by combining volatile crypto exposure with equity positions in firms building infrastructure, custody and fintech services tied to tokenization and digital adoption.
The mandate will allow the manager to take long and short positions across both sides of the portfolio. About 30% of assets will be allocated to direct cryptocurrency holdings — explicitly including Bitcoin, Ethereum and Solana — while roughly 70% will be invested in financial‑services stocks that benefit from crypto adoption.
Galaxy frames the approach as active risk management: being able to short declines is central to generating returns when markets pull back. The reporting cites recent market stress — including a sharp fall from an October peak that saw Bitcoin decline roughly 29% to below $90,000 — as a rationale for a bidirectional strategy that seeks alpha in turbulent conditions.
Galaxy said the fund will focus on identifying “winning and losing companies” and capitalizing on “disrupters” within the financial‑services ecosystem, targeting firms that integrate on‑chain functionality or provide regulated custody and infrastructure services.
Capital, timing and regulatory backdrop
Initial commitments reportedly come from family offices, high‑net‑worth individuals and institutional investors, with Galaxy providing seed capital to align interests. The firm positions the vehicle as a bridge for institutional capital into digital assets, pairing token exposure with equities to address liquidity and compliance concerns.
Regulatory developments in 2025 — referenced as updated SEC custody rules and the EU’s MiCA framework — are presented as enabling conditions that increased the fund’s institutional viability.
The strategy is pitched as a diversification between the high growth and high volatility of direct crypto exposure and the steadier characteristics of public equities tied to the sector. That mix is meant to appeal to allocators seeking exposure to tokenization without a pure long‑only crypto mandate.
Investors will now be watching the planned Q1 2026 launch as a practical test of whether a hybrid long‑short vehicle can deliver consistent returns and improved liquidity profile in a market still prone to sharp swings. If the fund attracts further institutional capital, it could reinforce the trend toward integrated crypto‑equity strategies and influence how allocators balance token and equity exposures going forward.
