Liberation Begins With DeFi
The Fund rebounded with a positive month of 8.76% in April, but YTD performance remains down 6.73% at the end of the month (NAV return, see standardized performance). While the beta1 may be higher, the performance was in line with market outcomes.
Liberation Day on April 2nd hit markets like a bad April Fool’s Day joke, but no one laughed, and markets were pushed into a frenzy. Fortunately, most markets did rebound, as we wrote in the April BLOK-Chain Monthly Report, “Cooler Heads Will Prevail.” Month-to-month performance was extraordinarily volatile, but we believe it is clear that digital asset efficiencies will add significant value across industries over the next three to five years. Any CEO or portfolio manager not looking closely at the benefits this technology could bring as an asset class is running a serious risk of being disrupted.
The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For most recent month-end performance, visit BLOKETF.com.
April Regulatory Progress
Crypto policy seems to be moving forward with transparency and active public engagement. This administration seems to be making “fast friends” among the government regulatory agencies with a real effort towards coordination as evidenced by these examples:
April 4th, 2025
The SEC’s Division of Corporation Finance (the Staff) published a statement on Stablecoins clarifying that in the Staff’s view on the offer and sale of certain dollar-backed stablecoins does not involve an offer and sale of securities requiring registration under U.S. federal securities laws (the Stablecoin Statement).2 For further reference about what a Stablecoin is readers should review a16z Crypto editorial: A guide to stablecoins: What, why and how.3
April 16th, 2025
Senate Banking Chairman Tim Scott (R-SC) released two fact sheets on the GENIUS Act’s consumer protection and national security implications for stablecoins.4 Federal Reserve Chair Jerome Powell publicly endorsed the push for congressional stablecoin legislation, and Acting Comptroller of the Currency Rodney Hood reaffirmed support for responsible digital asset innovation as part of the OCC’s (Office of the Comptroller of the Currency) broader modernization agenda. This kind of coordination among agencies has never been seen before in the history of the technology and asset class.
April 21st, 2025
Paul S. Atkins was sworn in as the new SEC Chairman. On his fourth day “back” after publicly stating that the industry has been “stifled for several years,” he noted at the Crypto Task Force Roundtable that he looks forward to engaging with market participants and working with colleagues in President Trump’s Administration and Congress to establish a rational, fit-for-purpose regulatory framework for crypto assets.5 We would highlight that the Crypto Task Force meets twice a month to address the program of regulatory framework and is transparent about what is discussed as provided on their website: sec.gov/about/crypto-task-force.
April 30th, 2025
North Carolina made further progress in establishing a state Bitcoin reserve with the passage of HB 926, the Digital Assets Investment Act in the house. The bill allows the state to invest in a Strategic Bitcoin Reserve, allows state employees to invest in digital assets through retirement plans, and would establish a state-managed digital asset reserve for confiscated cryptocurrencies. The Bill, which passed with a vote of 71 to 44, will now move to the State Senate. Of note, Arizona was the first state to deliver a bill to a governor, and this bill was vetoed. We believe that the action by certain states to embrace Bitcoin and/or “Digital Assets” is a step forward to demonstrate the progressive nature of how they might attract industries in technology.
We expect that such activity and transparency will be viewed by the markets as more than just positive for the price of Bitcoin. It is encouraging for Blockchain venture capital, the IPO (Initial Public Offering) market, and furthers adoption of the technology. Historically, according to data from the May 2nd Galaxy Research Crypto Blockchain Q1 2025 report7, Bitcoin price action has historically been followed by greater market engagement and venture capital activity, so arguably investment activity in the asset class has bottomed out. We would be surprised if venture capital investments in 2025 don’t eclipse the peak in 2021.
- Venture capital investment in crypto startups was $4.9bn (+40% QoQ) across 446 deals (+7% QoQ) in Q1 2025.
- Later-stage deals captured the most capital investment (65%), while early-stage deals accounted for 35% of capital invested. Q1 2025 was the first quarter since Q3 2020 in which later-stage companies captured a bigger share of capital investment than early-stage companies.
- Trading companies raised the most capital, led by Binance’s $2bn raise from MGX, followed by DeFi protocols ($763m) and Infrastructure companies ($506m).
- On the fundraising side, investors allocated $1.9bn to 18 new crypto venture funds.
Transactions and Repositing:
During the month, the Fund increased positions in Core Scientific (CORZ), Cipher (CIFR), HUT8 (HUT), and Block Inc (XYZ). These buys were funded from completed sales of Alibaba (BABA), CACI International (CACI) and Applied Digital (APLD). We consider those companies that we increased to be...
1Beta is a measure of a portfolio’s or stock's volatility in relation to the overall market.
2www.sec.gov/newsroom/speeches-statements/statement-stablecoins-040425
3a16zcrypto.com/posts/article/stablecoin-guide-what-why-how/
4GENIUS ACT: “Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025”
5https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-crypto-task-force-roundtable-042525
6https://www.ncleg.gov/BillLookup/2025/H92
7https://www.galaxy.com/insights/research/crypto-venture-capital-q1-2025/