Portal Asset Management 2025 Year End Report
2025 Trends
Euphoria to Reset
Structural Maturity Emerges
Speculation to Allocation
This year brought a pivotal challenge to the digital asset ecosystem, marked by intense volatility and a significant market correction.
Review of 2025
As we close the books on 2025, the digital asset markets have delivered yet another year of profound contrasts; one that tested convictions while reinforcing the sector’s long-term trajectory. Bitcoin began the year with explosive momentum, surging past $100,000 in the opening days amid post-halving optimism, record ETF inflows, and a decidedly pro-crypto shift in U.S. policy under the new Trump administration. Institutional demand was relentless through the first three quarters, with spot Bitcoin ETFs alone attracting tens of billions in fresh capital, pushing the total market capitalisation toward $4 trillion and driving Bitcoin to intraday highs above $125,000 by early October.
This rally was underpinned by meaningful structural progress: the establishment of a U.S. Strategic Bitcoin Reserve via executive order, bipartisan advancement of market-structure legislation like the GENIUS Act and accelerating corporate adoption as treasuries and sovereign entities alike recognised Bitcoin’s role as a scarce, non-sovereign store of value. Ethereum and select layer-1 protocols benefited from renewed focus on tokenisation and stablecoin utility, while regulatory clarity in the EU under MiCA provided a template for global standards.
Yet the fourth quarter brought a sharp and, some would say, necessary reset. Overleveraged positions unravelled amid fading macro liquidity expectations, tariff-related uncertainty, and a broader risk-off environment that saw cascading liquidations wipe over $1 trillion from the market capitalisation of crypto assets in weeks. Bitcoin retraced more than 35% from its recent all-time high, closing the year 6.3% lower, its first annual decline since 2022, while volatility spiked to levels not seen since the prior bear market lows.
This painful deleveraging, however, has cleared excesses and laid a healthier foundation. On-chain metrics show long-term holders are now back into accumulation mode after having been steadily decreasing for months, speculative leverage is now back at multi-year lows, and developer activity is continuing unabated. The shift from retail speculation to institutional allocation is now unmistakable, with Bitcoin increasingly viewed as a macro asset class rather than a purely cyclical trade.
December 2025 Overview
December 2025 wrapped up a tumultuous year for the digital asset sector, with persistent downward trends, forced unwinds, and hints of recovery amid regulatory advancements and lingering economic pressures. In December, Bitcoin consolidated at lower levels after earlier highs, losing ground due to profit-taking, ending the month down 3.0%. The Radiance Multi-Strategy Fund net asset value (NAV) finished December down an estimated -6.5%, in US$ terms.
Risk Management: The Foundation of Our Process
Q4 was a challenging period for Bitcoin and crypto in general, and we recognise the recent results were frustrating. It is, however, important to place this period in the proper context. October 10th was the largest liquidation event in crypto history, with flow-on effects into November and December. This was a true black-swan liquidation, not a slow deterioration or structural breakdown of the portfolio. As such, the risk management process worked flawlessly within the Radiance portfolio, allowing it gear up to buy into the Bitcoin price dip.
This meant that with higher leverage, the mark-to-market net asset value was significantly impacted in US dollar terms. But it is worth reiterating that the strategy is specifically designed to accommodate 30%+ pull-backs in the Bitcoin price during a bull market, to leverage into them and participate in the expected price recovery. We have risk management via “insurance” puts in place to accommodate such downside volatility.
Adding Strategies to Mitigate Downside Volatility
We recognise that monthly drawdowns of 30% to 50% can be challenging for investors, as this level of volatility is often perceived as a risk of loss. As such, we plan to add additional strategies that we have been building, testing, and refining over the past 6 months. The goal of these strategies is to provide additional risk-adjusted income, utilised in a put protection strategy to limit downside volatility in the portfolio. Importantly, these strategies will not limit the upside participation during strong directional Bitcoin moves. We look forward to rolling out these strategies in the coming months and will keep investors updated on progress.
Early January Bitcoin price action and liquidity conditions have been more constructive than Q4, creating a more favourable environment heading into Q1 of 2026.
2026 Outlook
Old Models Challenged
Liquidity Repriced Risk
Next Expansion Sets Tone
Looking ahead to 2026, it is increasingly clear that Bitcoin is no longer trading on a simple halving-driven playbook. The events of 2025 challenged the reliability of the traditional four-year cycle and highlighted the growing influence of macroeconomic conditions and institutional capital. What follows examines whether this marks a permanent structural shift, or a delayed cycle that is now tightly bound to global liquidity and economic inflection points.
As we head into 2026, the key question is whether Bitcoin’s traditional four-year halving cycle, historically delivering three up years followed by one down, has broken down or simply evolved. The evidence is stark: Bitcoin ended 2025 down ~6% despite the April 2024 halving and a new all-time high near $126,000, breaking the expected “three green, one red” pattern for the first time.
The traditional view of Bitcoin’s four-year cycle centres on the halving event, which occurs approximately every four years (every 210,000 blocks mined) and cuts the block reward, and thus new Bitcoin supply, in half. This supply shock is believed to drive a predictable boom-bust sequence, reinforcing Bitcoin’s scarcity, combined with growing adoption and speculation: anticipation builds in the months before the halving, triggering a pre-halving rally; the reduced issuance then sparks a prolonged post-halving bull market, typically peaking 12–18 months later with explosive price gains and widespread euphoria; this is followed by a severe bear market correction, often 80%+ drawdowns; and finally, a multi-year accumulation phase sets up the next cycle.
Does the four-year Cycle Extend?
One view is that the cycle isn’t dead but delayed and distorted. Post-COVID fiscal stimulus and monetary policies shifted historical ~4-year business/liquidity cycles to 5–5.5 years or longer. This occurred as massive debt maturities were refinanced amid low rates, delaying peaks in liquidity and risk appetite. What is most likely is that the Bitcoin halvings themselves were never the primary catalyst; they merely coincided with favourable macro periods in prior cycles.
Or Is It Dead?
The other side of the argument is that the four-year cycle is effectively over, replaced by broader macroeconomic forces. The bull run from $16,000 (2022 low) to $126,000 occurred entirely against a prolonged headwind: the longest manufacturing contraction in decades, as shown by the Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) below 50 (contraction). The ISM PMI serves as a strong leading economic indicator because it provides timely, forward-looking insights into business conditions that often signal shifts in the broader economy before official data confirm them.
It is likely that ETF adoption and corporate treasury buying (MicroStrategy, Metaplanet) drove gains despite these headwinds, not because of the halving supply shock. Had those institutional flows coincided with macro tailwinds (lower rates, booming business cycle), a classic euphoric peak might have materialized earlier. Instead, the absence of retail frenzy, flatlined Google search interest, and struggling consumer finances muted the cycle’s intensity.
Global Liquidity entered Gold and AI, instead of Crypto
2025 was notable in terms of the decoupling between the Bitcoin price and expansions in global M2 money supply; the broad measure of cash, deposits, and near-money across major economies. Bitcoin has long been viewed as a hedge against fiat currency debasement, with its price historically lagging M2 growth by 10-12 weeks or up to 84 days, with correlation coefficients as high as 0.78-0.94.
The post-2020 pandemic stimulus exemplified this: M2 surges fuelled BTC’s bull runs, as liquidity flooded risk assets. However, the strong previous relationship seemed to break in the second half of 2025; global M2 expanded from $104 trillion to over $115.3 trillion, an 8%+ or $10T+ rise, mirroring 2020 levels, yet BTC stalled at $126,000 in October before dropping to sub-$90,000 ranges. In this environment, liquidity shifted to AI stocks, precious metals, and traditional assets instead of crypto.
Current consensus is leaned toward cautious optimism for 2026: Bitcoin performed impressively against headwinds, setting up potential for significant upside once PMI flips above 50 in 2026 (possibly accelerated by Fed leadership change and liquidity rebound). The traditional rigid 4-year pattern may be gone, but a longer, macro-driven cycle could deliver higher prices over a sustained period.
Conclusion
Foundations Rebuilt, Not Broken
Positioned for Acceleration
2025 was a transformative year because the foundations of the asset class were rebuilt. With the end of Choke Point 2.0, the arrival of ETFs, and the influx of institutional capital, Bitcoin is no longer a fringe, retail-driven instrument. It is now becoming a structurally embedded component of global portfolios.
As we enter 2026, the core principle remains: the cryptocurrency industry evolves at a breakneck pace. 2026 will amplify this truth. Increasing institutional adoption, regulatory clarity (e.g., broader ETF approvals and market structure laws), tokenised real-world assets, and deeper TradFi integration will supercharge this dynamic even further.
We are not merely passive bystanders; we are active in strategies designed to profit from uncertainty and volatility. Our commitment is to remain vigilant in risk management, agile in research and transparent in partnership.
As we look back on 2025, we express our sincere appreciation for your continued interest, trust, and partnership, and wish you a prosperous New Year.
Sincerely,
Greg Galton
Chief Investment Officer
📧 [email protected] | 🌐 www.portal.am