Blockchain: Real utility, real returns

What Is It All About?

The Blockchain & Digital Assets strategy provides exposure to stocks integral to the distributed ledger ecosystem, enabling investors to benefit from blockchain's transformative growth. The investment universe includes crypto miners and validators, crypto exchanges, specialized hardware providers, and financial institutions bridging traditional and digital finance.

We focus on companies whose revenue and earnings depend directly or indirectly on the price evolution of digital assets. As a result, the strategy exhibits a high correlation to Bitcoin (one-year correlation of 0.75), which has contributed to an outperformance versus broad equity markets. As of the end of November 2025, the strategy has delivered +23.7% annualized since inception (net of management and performance fees), compared with +22.5% p.a. for the Nasdaq-100 and +16.0% p.a. for the MSCI ACWI.

A Look In The Rearview Mirror

A volatile year, despite significant ecosystem progress

At the time of writing, 2025 appears to be a lost year for crypto-related equities, with a flat performance that underperforms large-cap indices. Yet fundamentals improved rather than deteriorated. The year can be summarized as a play in three acts.

Act I. The Trump administration issued multiple executive orders in the first half of the year to position the United States as the global crypto capital. The building blocks of the U.S. crypto regulatory framework started taking shape, with the approval of the GENIUS Act over the summer. With clear rules that will reshape the payment industry (see the launch of our Stablecoins strategy), institutionalization of the crypto space is accelerating. Retail enthusiasm thrives, while exchanges (e.g., Coinbase Global Inc and Robinhood), to which we are overweight, outperform other segments.

Act II. The AI-infrastructure boom propelled Bitcoin miners to record levels. However, miners (most notably those with high exposure to high-performance computing) are no longer sensitive to Bitcoin prices, and we remain relatively underweight in this segment. Stocks like Iris Energy or Cipher Mining are now AI plays, not crypto plays anymore. In parallel, attacks on the playbook of digital asset treasury companies, such as Strategy, have reappeared. This coincides with a surge of new entrants aiming to mimic the next Strategy; yet these firms must now compete for fresh capital against AI-infrastructure players and even sovereign states. Valuations are under pressure.

Act III. The sudden liquidation of $20bn in crypto positions on 10 October 2025, derailed the crypto market. It was triggered by tariff headlines but amplified by structural fragilities. The temporary depeg of USDe (a synthetic stablecoin that would not meet GENIUS Act requirements) exposed excessive leverage and weak market architecture. Since then, equities and other asset classes have rebounded, but cryptocurrencies have not. Through this event, they reconfirm their status as a separate asset class. Liquidity in the crypto market has been lower, suggesting a major player or market maker was significantly impacted and may have reduced its exposure for the time being.

What We Are Watching

It is not the first time (and certainly not the last) that the inefficiencies of crypto markets weigh on performance. Bitcoin and its peers remain highly volatile, although this volatility is expected to decrease as the asset class becomes more institutionalized. Long-term investors are largely unfazed by recent corrections. They have lived through the implosion of FTX, the Terra–Luna collapse, the 2021 Chinese ban, and the 2018 ICO bubble.

Building tomorrow’s financial infrastructure does not happen overnight. What matters is that the long-term trajectory remains intact. Recent market events will fade; the upcoming developments look increasingly promising.

From mass-institutionalization to sovereign adoption

A clearer regulatory framework was a prerequisite for large-scale crypto allocations. This is now becoming a global reality, with no U-turn in sight. In the United States, the GENIUS Act (the country’s first comprehensive stablecoin framework) was only the beginning. The upcoming CLARITY Act should provide the missing architectural layer: clear rules governing market functioning and the role of exchanges, custodians, issuers, and tokenization platforms. It will also provide regulators with the tools to monitor markets and identify abuses in real-time, reducing the likelihood of a repeat of events such as those of 10 October. With this structure in place, institutional adoption is expected to keep accelerating.

Sovereign participation is also rising. Twenty-seven countries now hold direct or indirect cryptocurrency positions, with several (including Luxembourg and the Czech Republic) acquiring their first Bitcoins this year. Abu Dhabi’s sovereign wealth funds alone hold roughly half a billion dollars’ worth of Bitcoin ETFs. Endowments are also turning into steady buyers: Harvard recently disclosed its largest public holding (0.83% of assets allocated to BlackRock Inc’s IBIT), surpassing positions such as Nvidia and Microsoft.

While retail investors panic, institutional asset owners accumulate. More than 150 countries have yet to take decisive action on crypto, alongside thousands of institutions still in the early stages of their digital-asset roadmap.

Killer apps in the starting blocks

Ethereum’s latest upgrade (Fusaka) delivers higher throughput, predictable fees, and faster Layer-2 growth. These technological blocks are essential to support real-world blockchain applications transacting at a mass scale. Other protocols are also advancing rapidly, pushing the entire infrastructure layer closer to production-grade capacity.

Stablecoins are on track to reshape payments globally. Banks, fintech, and card networks are no longer experimenting, rather building the next generation of payment rails: faster, cheaper, 24/7, and programmable.

In parallel, financial infrastructure is being upgraded to facilitate the tokenization of real-world assets. Regulatory developments in the U.S. are expected to unlock broader adoption. Excluding stablecoins, the value of assets tokenized on-chain tripled this year according to rwa.xyz, with U.S. Treasury bills accounting for roughly half. This growth should continue as tokenized collateral, credit, and deposits continue to gain traction.

Another emerging category is prediction markets. During the U.S. elections, volumes reached billions. Weekly aggregate turnover on “betting” platforms such as Kalshi, Polymarket, and Opinion now frequently exceeds that level, with millions of transactions per day. This is not just the future of gambling, it is the evolution of financial markets. Investors can now “predict” future asset prices, earnings, or macro events such as Fed cuts. Robinhood has leaned heavily into this trend: prediction markets are its fastest-growing product line, and the firm is simultaneously leading innovation in tokenization.

Navigating a perma-crisis economy

Cryptocurrencies share features of both risk-on and risk-off assets. Their behavior during the Silicon Valley Bank systemic episode in 2023 (acting as a liquidity hedge when traditional markets seized) illustrated this duality vividly.

Record sovereign debt, chronic fiscal deficits, and persistent liquidity injections are now structural features of the global economy. The consequence is a gradual but relentless erosion of fiat purchasing power. The debasement trade is far from over, and cryptocurrencies have significant catch-up potential as investors seek alternatives to cash and fixed-income instruments. In this environment, holding cash may eventually become the riskiest bet.

Where We Stand, And What's Ahead

As regulatory changes are far from being finalized, we aim to maintain our overweight exposure to companies that are expected to benefit most from the new framework. This primarily includes exchanges (Robinhood and Coinbase Global Inc) as well as crypto enablers such as Galaxy Digital, which stand at the intersection of institutional flows, tokenization, and compliant market infrastructure.

We remain vigilant on Bitcoin miners (Riot Platforms, CleanSpark Inc). More companies are expected to pivot entirely toward high-performance computing or cloud services, reducing their sensitivity to Bitcoin. In such cases, we will not hesitate to reduce exposure further, as these transitions dilute the crypto linkage that underpins our investment mandate.

We also aim to keep indirect exposure to cryptocurrencies through a selective allocation to digital asset treasury companies (Strategy, Bitmine Immersion Technologies Inc). In this regard, we will closely monitor the potential removal of Strategy from major indices, with a formal decision expected in mid-January 2026. While such a move could increase pressure on valuation multiples, it would have a minimal impact on the company’s solvency. Should its market capitalization fall to a material discount versus the Bitcoin held on its balance sheet, it could even present a very attractive opportunity.

2025 challenged sentiment but not the foundations of the ecosystem. Regulation is aligning, institutions are building exposure, and the first real on-chain applications are scaling. The disconnect between progress and prices will not persist indefinitely. As fundamentals reassert themselves, we expect blockchain stocks to converge toward their long-term trajectory. Our portfolio is positioned for this transition, focused on the companies building the rails of tomorrow’s financial system and ready to capture the value creation that follows.