February 2025 Market Commentary
February 2025 Market Commentary
MARKET INTELLIGENCE
Market Performance:
Mark O Witten, CFA
- February saw Bitcoin drop 23.5% from $102,400 to $78,330, before rebounding 7.7% to $84,380.
- The sell-off was triggered by the unwind of the BTC vs BTC Futures carry trade and large ETF redemptions.
- Geopolitical events added uncertainty, including Trump’s proposed tariffs and foreign policy shifts.
*Past performance is not indicative of future performance. Specific risks may impact on the possibility of such a return in future.
Investment Strategy Pivot
- Portal’s Radiance Multi-Strategy Hedge Fund is now 100% allocated to owning and compounding BTC.
- BTC has been the highest performing asset in 9 out of the past 12 years* but is volatile. The strategy harnesses this volatility to generate income which is settled in BTC.
- This Bitcoin Extraction Strategy (BESt), over the past 24 months, has generated 5-7% BTC monthly (compounding to 100% annually).
- On January 1, 2025, the Radiance Fund successfully deployed BESt, which delivered a 6.5% growth in BTC for the month and a 17.3% total return on BTC holdings.
- On March 1, the fund changed the Investment Manager from its European manager to its existing Singapore and partnered Mauritius managers. These managers are closer to our investors and enable the full breadth of the strategy to be deployed. For more information reply to this email.
Growing BTC Adoption & Institutional Investment
- BTC projected to reach $300,000 – $1,500,000 with a base case of $710,000**.
- Key drivers of adoption:
- US Spot Bitcoin ETFs have seen $40B+ in net inflows and $120B AUM in one year.
- Institutional investors (Brevan Howard, Yale, Rockefeller Foundation) increasing BTC exposure.
- Government adoption: Trump signed an Executive Order for a Strategic Bitcoin Reserve.
- Corporate investment: BlackRock integrating BTC into $150B model portfolio ecosystem.
- Retail & Family Offices realising BTC’s portfolio diversification benefits.
- SEC regulatory shift: Crypto enforcement actions winding down, pro-crypto stance emerging.
- State-level adoption: Texas set to establish a Strategic BTC Reserve.
HedgeNews Africa 2025 Symposium:
- Portal’s CIO, Mark Witten, attended the event, discussing crypto’s future with 250+ hedge fund managers.
- Discussions included recession risks, AI in alternative investments, and digital asset adoption.
- Panel discussions highlighted regulatory and institutional support for crypto, fund strategies, and BTC price forecasts.
- Increasing demand for BTC and digital assets from institutional-grade fund management in South Africa and emerging markets.
Conclusion
- BTC is solidifying its position as a global macro asset, now fully legitimised by the US government.
- Institutional investors are reshaping BTC’s market dynamics, driving long-term demand.
- Portal remains committed to BTC accumulation, using BESt to grow holdings over the next 5 years.
VOLATILITY, REGULATORY SHIFTS & INNOVATIONS PROPEL STRATEGIC ADJUSTMENTS
Market Overview:
Greg Galton, Analyst Adviser
Trump’s Crypto Strategic Reserve & Summit
- Announced plans for a U.S. crypto strategic reserve, including XRP, SOL, ADA, BTC, and ETH.
- Details on structure and valuation remain unclear.
- Hosted first crypto summit on March 7, bringing together business leaders and investors.
BlackRock Expands Bitcoin Exposure
- BlackRock added 1%-2% allocation of iShares Bitcoin Trust (IBIT) to its alternative asset model portfolio.
- First time BlackRock has included Bitcoin in model portfolios.
- Could drive wider institutional adoption, influencing $130 billion in managed assets.
MicroStrategy (Now Strategy) Bitcoin Acquisition
- Purchased 20,356 BTC (~$2 billion) on February 24, bringing total holdings to 499,096 BTC (2.3% of total supply).
- Funded through a zero-coupon convertible note offering.
- Strategy’s approach was praised for boosting the market cap but was criticised for long-term sustainability risks.
Record-Breaking Crypto Theft
- $1.46 billion stolen from Bybit (Dubai-based exchange) on February 21.
- Malware attack tricked the exchange into approving fraudulent transactions.
- Largest crypto heist ever, surpassing Poly Network’s $611M theft (2021).
- Attributed to North Korea, which has stolen $6 billion+ since 2017, funding missile programs.
SEC Drops Uniswap Investigation
- SEC abandoned the investigation into Uniswap Labs, which was previously accused of operating as an unregistered securities exchange.
- Follows similar dropped cases involving Coinbase, Binance, Gemini, and others.
- Coincides with leadership change at SEC (Gary Gensler resigned, replaced by Mark Uyeda).
- Signals potential shift towards clearer crypto regulations.
Venture Capital Investment in Crypto
- Crypto VC funding surged to $951M in February, a 14% increase from January.
- 98 deals closed, showing strong institutional interest.
- Investors focusing on long-term blockchain & DeFi opportunities despite market volatility.