Crypto Fund Outlook Magazine 2Q25

Download the Full Report

📄 Click here to access the complete PDF report

Intro

Produced by Crypto Insights Group (CIG), the Hedge Fund Outlook 2Q25 delivers allocator sentiment, fund manager perspectives, operational due diligence insights, and market trends shaping the future of digital asset hedge funds.

Inside the full report you’ll find:

• Key liquid fund themes from 2Q 2025
• CIO perspectives across fundamental, quant, DeFi, and macro strategies
• Allocator views on diligence, risk, and adoption trends
• Operational due diligence frameworks for institutional allocators
• Survey insights from 50+ funds representing nearly $5B AUM

Continue reading below for the full verbatim text of the report.

Page 1

Hedge Fund Outlook 2Q25
Insights Quarterly
April 2025

Page 2 — Disclaimer

The content provided in this report, including all text, figures, data, and any other information, is intended solely for informational and educational purposes. It is not, under any circumstances, to be construed as financial, legal, tax, or investment advice. The information presented is not meant to serve as the basis for any kind of investment decision, nor does it recommend any specific financial products, services, or investment strategies.

The creators and distributors of this report make no representations or warranties, express or implied, as to the accuracy, completeness, reliability, suitability, or availability of the information contained in this survey report. The information is provided "as is," and any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to the survey report, or by anyone who may be informed of its contents.

Market conditions, financial theories, and investment strategies are subject to fluctuating interpretations and can vary widely based on individual circumstances. Therefore, any information provided should not be considered universal or applicable to all individuals or situations.

Participants and users of the information provided by this report should conduct their own due diligence and consult with professional advisors familiar with their particular factual situation for advice concerning specific matters before making any decision. This includes seeking advice from qualified financial advisors, legal counsel, and tax professionals to understand the potential risks and rewards associated with any financial decision. Forward-looking statements in this document are valid only as of their respective dates and Crypto Insights Group is under no obligation to update them. These statements are inherently subject to many changing assumptions, risks, and uncertainties. Nothing in this document should be interpreted as investment, legal, tax, or any form of advice, nor should it serve as a basis for making investment decisions. Potential investors in digital assets, regardless of their experience or wealth, are urged to consult independent financial advice tailored to their specific situation. This document is intended for and available solely to professional clients.

By engaging with this report as a viewer, you acknowledge and agree that neither the creators nor distributors of the survey and survey report shall be held liable for any losses, damages, costs, or expenses, including legal fees, arising either directly or indirectly from decisions made based on the information provided. This disclaimer is not all-inclusive and should be considered alongside any other relevant disclaimers, terms of service, privacy policies, and/or limitations that might apply to the report or the information supplied.

Please see CIG’s latest Terms of Service: https://www.cryptoinsightsgroup.com/terms-of-service

If you have any questions, please email us at support@cryptoinsightsgroup.com

Please read this disclaimer and an additional disclaimer on page 31 carefully before utilizing any information derived from this report.

Page 3 — Foreword

The first quarter of 2025 has been simultaneously exhilarating, demanding, and full of opportunity for digital-asset investors. The arrival of the Trump administration jolted markets, regulations, and sentiment—yet liquid fund managers emerged more confident than ever.

From our vantage point at Crypto Insights Group, where we track performance, risk, and flows across digital asset strategies and separately managed accounts, we see a maturing ecosystem that is still only beginning to reveal its potential.

Lower than expected venture fund DPI has pushed institutional attention toward liquid strategies, creating fresh avenues for managers to raise funds.

Opportunity, however, comes paired with responsibility. If digital assets are to attract the deep pools of institutional capital that propel lasting growth, our industry must lower the practical barriers that still deter allocators.

Education on underlying technology is only step one; equal weight must be given to robust operational controls, transparent communication, and verifiable data. Sometimes that means importing best practices from the world of finance. In other cases it requires pioneering higher standards unique to on-chain markets—standards we, as stewards of the space, must uphold.

The path forward will be demanding, but firms that internalize rigorous processes today will help shape and lead a resilient, institution-ready market tomorrow.

At CIG we are working hand in hand with allocators and managers to build the tools, analytics, and benchmarking frameworks that make this transition possible.

Andy Martinez, CFA
Founder, Crypto Insights Group

Page 4 — About CIG

Our mission is to support the global adoption of digital assets.

CIG’s Institutional Allocator Portal empowers fund managers and allocators with the ability to streamline the identification, diligence, and monitoring of the asset class.

CIG’s platform includes a comprehensive suite of data management tools, analytics, benchmarking and research reports covering the investment landscape.

For Allocators, Institutions, and Fund Managers...

• CIG Portal — Simplify your due diligence process with a centralized platform that seamlessly connects funds and allocators.
• Benchmarking — Peer group analysis with risk-adjusted analytics, including data from leading benchmark providers like CoinDesk and MarketVector.
• Operational Diligence Services — CIG supports funds to run ODD on themselves to button up, and provides expert-level ODD for allocators.

Our Partners
As seen in leading media outlets.

Identify, Diligence, and Monitor Crypto Funds
The CIG Portal serves funds and institutions globally and provides intelligent access to the digital asset fund universe.

Page 5 — 1Q 2025 Fund Manager Benchmarking Data

None of this is investment advice. Please read through, in full, our disclaimers on pages 2 and 31, and our terms of service on our website.

Directional Funds — 1Q 2025 YTD: -24.75%
Market Neutral Funds — 1Q 2025 YTD: +3.20%

Charts show January, February, and March performance by quartiles:

• Directional funds: -1.86%, -18.10%, -6.38% (Q1 total -24.75%)
• Market neutral funds: +1.51%, +0.84%, +0.81% (Q1 total +3.20%)

About CIG Benchmarks
CIG’s Portal aggregates performance data from across the digital-asset fund universe, powering its benchmarks, risk metrics, analytic tools, and watchlists. Allocators and institutions can review the full methodology directly within the platform.

Want to unlock in-depth analytics across the crypto fund universe?
Explore CIG’s curated data and analytics firsthand—reach out for a demo. Built with input from leading allocators and fund managers, the CIG Portal streamlines fund discovery, due diligence, and ongoing monitoring of digital asset funds.

Page 6 — Table of Contents

• Disclaimer 02
• Foreword 03
• About CIG 04
• 1Q 2025 Benchmarking Data 05
• Table of Contents 06
• Key Liquid Fund Trends 08
• Directional Fund Outlook – Fundamental Strategies 09
• Directional Fund Outlook – Quantitative Strategies 10
• Directional Fund Outlook – DeFi & Macro Strategies 11
• Market Neutral Fund Outlook 12
• The State of Fundraising 13
• Key Allocator Trends 15
• Operational Risk Framework for Crypto Fund Selection 16
• Accessing Decentralized Finance Strategies as an Institutional Allocator 17
• Tariffs, Protectionism, and the Catalysts for Crypto? 18
• In Volatile Times, Sound Valuations and Pricing Matter 20
• Institutionalizing DeFi: A Due Diligence Blueprint 21
• When Crypto Meets Institutions 23
• On Chain Asset Management 24
• Tools Supporting the Growth of Liquid Funds 25
• Fund Manager Survey Insights 26
• Insights from the Fund Manager Survey 27
• Trump’s Impact on the Liquid Token Market Structure 28
• Conclusion 29
• Special Thank You 30
• Disclaimer 31
• Thank You 32

Page 7 — Fund Manager Perspective (Divider)

Section divider page.

Page 8 — Key Liquid Fund Trends (CIG View)

1. 1Q25 Stress Tests Risk Management
   Geopolitical flashpoints and shifting macro data whipped digital-asset markets in Q1 2025, turning the quarter into an unscripted stress test. Volatility exposed the breadth of fund manager playbooks: results diverged, but managers leveraged refined risk controls and disciplined sizing to navigate turbulence. The quarter offered managers a valuable stage to demonstrate risk-management discipline.
2. Demand of Operational Readiness
   With larger, more sophisticated allocators moving into digital assets, operational readiness has become a baseline expectation. Pitch decks no longer suffice; managers are now expected to show documented controls, independent verification, and auditable workflows before capital is committed. CIG is collaborating with fund teams to map these requirements, share best practices, and build processes that satisfy institutional due diligence checks.
3. Lost in Benchmark Selection
   Benchmarks create a shared language between allocators and managers, but in crypto that language is muddied. Many allocators default to Bitcoin while funds target broader market outperformance, producing skewed scorecards. With strategies ranging from quantitative directional to niche thematic, standardized benchmarks remain scarce. Both sides must clarify objectives and agree on references that genuinely reflect each mandate’s risk and opportunity set.
4. Tokenization Needs Allocator Buy-In
   Roughly thirty percent of liquid fundamental funds have explored tokenizing their vehicles, yet steep operational hurdles and uncertain inflow benefits temper urgency. Early adopters are acting as trailblazers, shouldering the task of explaining token mechanics, custody, and reporting to allocators who have not delved into tokenization. Managers must weigh that educational burden against time spent courting capital through more familiar channels.
5. Making Fundamentals Matter
   With retail-driven swings, proliferating subsectors, and liquidity surges from token unlocks, fundamentals often drown in noise. A cadre of institutional crypto funds is pushing back, championing cash-flow, treasury, and network activity metrics as anchors for valuation. Translating these yardsticks to a fragmented audience remains hard, but their advocacy is an early step toward a more disciplined, institutional market.
6. Shrinking Basis Drives Alpha Search
   After peaking above 10% in Q4 2024, the CME futures basis slipped below 5% for stretches of Q1 2025, barely clearing today’s 4% risk-free rate. Market neutral desks that once feasted on static cash-and-carry spreads must now cultivate new, repeatable alpha streams. Keeping an edge demands deeper market-structure exploitation plus the technology, data, and execution processes required as competition intensifies.

Page 9 — Directional Fund Outlook (Fundamental Strategies, CIO Perspective)

Jeff Dorman, CFA – CIO, Arca
Jeff Embry – Managing Partner, Globe 3 Capital
Kevin Mills – Head of Research, Triton Digital
Andrew Woodruff, CFA – CIO, Black Lotus Capital
Tyler Evans – CIO, UTXO Management

Long-biased, research-driven managers remain a mainstay of active crypto investing, providing insight into long-term positioning. While most lean bullish, approaches vary: some hedge market risk, others target narrow verticals, and holding periods range from weeks to years.

Q1 tested conviction with regulatory overhangs, tight liquidity, and shifting macro tone. Seasoned managers navigated the turbulence with deep fundamental work. Their takeaway: despite near-term crosswinds, disciplined, thesis-led strategies remain committed to the asset class and are poised to capitalize as the next cycle unfolds.

Highlighted quote (Jeff Dorman):
“I’ve never been more right about where crypto is headed, and made less money… While investor philosophy is moving closer to our vision, the market structure and investor base have never felt further away.”

Other perspectives:

• Crypto rallied from December 2022 lows but has since stalled.
• A correction in Q1 2025 was seen as normal within a broader bull market.
• Macro risks like tariffs drove a global flight to safety, hitting altcoins harder than Bitcoin.
• Bitcoin’s resilience is notable, with weakening correlation to equities.

UTXO Management commentary emphasized a focus on Bitcoin Treasury Corporations actively fundraising and building balance sheets. Despite tariff-driven uncertainty, crypto valuations remain attractive, with several projects trading at P/E ratios below 10 and strong fundamentals.

Page 10 — Directional Fund Outlook (Quantitative Strategies, CIO Perspective)

Chris Sullivan, CMT – Co-Portfolio Manager, Hyperion Decimus
Tony Fenner-Leitão – President, Cambrian Asset Management Inc.
Mehdi Laurent Akkar – Co-Founder & CEO, Eltican Asset Management

Quantitative strategies in crypto borrow heavily from traditional markets. Portfolios often combine several uncorrelated models to dampen beta and preserve asymmetric upside.

Q1 2025 was challenging due to rising cross-asset correlations and patchy liquidity, highlighting the need for agile risk engines and diversified models.

Allocators are increasingly comfortable with systematic, market-neutral approaches. Success is judged by Sharpe, Sortino, and drawdowns, not the asset class itself.

Eltican perspective:

• Q1 2025 was the worst Q1 in seven years.
• Q2 presents an asymmetric risk/reward opportunity in digital assets.
• Regulatory overhangs are largely cleared, meme-coin destruction has removed froth, and BTC’s L2 development offers new growth.
• ETH has retraced to 2018 price levels, presenting long-term opportunity.

Macro factors:

• AI valuations, trade policy uncertainty, inflation, and geopolitics drove Q1 stress.
• Correlations with the Nasdaq-100 reached 2022 highs.
• Volatility around the proposed Bitcoin Reserve Fund added pressure.

Eltican sees conditions remaining supportive for diversified, systematic strategies into Q2.

Page 11 — Directional Fund Outlook (DeFi & Macro Strategies, CIO Perspective)

Evgeny Gokhberg – Managing Partner, Re7 Capital
Quinn Thompson – CIO, Lekker Capital
Tom Kral – CEO, LM5 Capital
Vadim Khramov – CIO, Edge Capital

DeFi-centric and macro-thematic managers now bookend a widening spectrum of specialist crypto strategies.

At one end, protocol-native teams dive into DAO governance, structure bespoke liquidity programs, and capture real yields available to those who navigate on-chain risk and smart contract nuance.

Q1 2025 ended with a sharp reset — February’s drawdown (largest since 2022) cleared out excess across alts while global market structure broke across fixed income and equities. With sentiment at all-time lows and macro uncertainty clearing, Q2 is shaping up constructively.

• Markets have priced in recession risks and prior tightening.
• Global M2 Liquidity is rising rapidly.
• The Fed communicated readiness to stabilize markets if needed.
• Many altcoins are attractively priced.

Dispersion will persist, favoring active liquid managers. High-growth sectors like perpetuals and stablecoins, with strong tokenomics, may be standout performers.

Macro perspectives emphasized Trump-era tariff policies as full-fledged geopolitical events. U.S. and global stocks are 10%+ off highs, ETH near FTX-era levels, and volatility elevated. While prolonged, the base case is no recession, limited long-term impact, and crypto’s borderless nature offers resilience.

Q1 2025 was turbulent: BTC and ETH dropped 30–50%, most alts worse. Delta-neutral strategies offered limited relief. Monthly neutral returns averaged 0.75–1.25%. Yields are pressured but acceptable. Q2 likely mirrors Q1 with elevated turbulence. Neutral strategies remain preferred in uncertain conditions.

Page 12 — Market Neutral Fund Outlook (CIO Perspective)

David van Goudoever – Co-Founder, M1 Capital
Ed Tolson – CEO, Kbit
Christophe Sfeir – CEO, Constella
Shiliang Tang – President, MNNC Group

Market-neutral strategies offer stability when markets swing in all directions. Returns now require technical precision, disciplined risk management, and deep market-structure knowledge.

• DeFi momentum is rising.
• Allocators are drawn to systematic, uncorrelated strategies.
• Adaptability is key for success in turbulent times.

Q1 2025 reminded markets that hype ≠ policy. Trump’s inauguration coincided with a retail collapse around “Bitcoin Strategic Reserve” memes and political tokens. Meme capital evaporated, leaving BTC resilient.

A hawkish Fed cut risk appetite, highlighting the need for disciplined, risk-managed strategies. Regulatory clarity is expected to attract traditional capital, but competition and correlations will rise.

Absolute return and adaptable strategies reaffirmed their diversifier role. Crypto’s volatility and fractured cycles provide fertile ground for uncorrelated returns.

BTC-denominated share classes are increasingly popular, letting allocators preserve core BTC while harvesting spread-based returns.

Kbit’s neutral strategies focus on alpha through disciplined market making, short-term forecasting, and arbitrage. Despite stricter scrutiny on custody and exchange risk, dispersion and inefficiencies remain abundant for well-tooled quant teams.

Page 13 — The State of Fundraising (Head of Capital Formation Perspective)

Crypto fundraising is entering a new growth phase, fueled by regulatory clarity, institutional interest, and private wealth demand.

• PwC 2024 Global Crypto Hedge Fund Report: 47% of traditional hedge funds have digital asset exposure (up from 29% in 2023).
• Coinbase 2025 Institutional Investor Survey: 75%+ of 300+ investors expect to increase digital asset allocations; over half plan to allocate 5%+ of AUM.

Q2 2025 is expected to bring renewed capital formation for liquid strategies. Key success factors: strategic positioning, robust infrastructure, and thematic differentiation.

Voices:

• Laura Vidiella del Blanco – Head of Investor Relations, Digital Assets, VanEck
• Olivia Nguyen – Head of Growth, Outerlands Capital

Fundraising momentum remains positive but slower than managers anticipated under the Trump administration. Net inflows continue, but the pace lags projections. Allocators calibrate risk budgets cautiously.

Venture DPI disappointments push LPs toward liquid strategies, though some remain wary of mark-to-market volatility. Managers are more visible at conferences, persistent in follow-ups, and cultivating multi-year relationships.

Some funds lowered minimums, courting RIAs and smaller family offices. Incremental dollars arrive, but a large AUM infusion is still needed to reach critical mass.

History suggests shifts happen slowly, then accelerate suddenly when macro signals, regulatory clarity, and performance align. Patience and persistence remain essential.

Page 14 — Allocator View (Divider)

Section divider page.

Page 15 — Key Allocator Trends (CIG View)

1. Crypto De-Risking, Hurdles Remain
   Trump’s election widened the door, but hurdles persist: diligence, custody, and regulation. Institutions require familiar conduits and extended learning curves before allocating.
2. Demand for Operational Excellence
   Allocators expect robust ODD standards: trade processing, controls, cybersecurity, compliance, NAV reconciliations. Proactive communication is equally critical. Post-FTX, polished systems plus updates build allocator confidence.
3. Seeking Sustained Alpha and Discipline
   Allocators value repeatable alpha, mandate fidelity, and clear yardsticks (excess return, Sharpe, Sortino). Transparency and discipline win trust.
4. Low VC DPI Shifts Focus to Liquids
   Venture DPI disappointments push LPs to revisit liquid strategies for quicker liquidity and tighter risk limits.
5. Allure of SMAs, But Data Lacking
   SMAs appeal, but performance data is often opaque. Without audits, selection bias is a concern. Verification services exist, but frameworks remain immature.
6. BTC Share Classes: Table Stakes
   BTC-denominated share classes are becoming a standard. HNW investors, family offices, and FoFs prefer rolling BTC directly into strategies.

Page 16 — Operational Risk Framework for Crypto Fund Selection (Allocator View)

Cyril Castelli – CEO, RCube Asset Management

At RCube, we actively monitor approximately 450 liquid absolute return strategies (funds and SMAs) in the global digital asset space for our multi-manager portfolios. Once strategies with excessive embedded beta are filtered out, we focus on around 350 truly market-neutral or alpha-seeking teams.

Using a rigorous quantitative screening process—evaluating diversification, performance, downside control, and track record—we narrow this to about 100 strategies, all of which we’ve engaged through detailed interviews over the past year.

A second due diligence phase includes deeper operational reviews and repeat assessments. Operational due diligence carries as much weight as investment performance in our framework.

Why? Because in crypto, counterparty and operational risks can escalate quickly. Unlike TradFi, residual risk remains higher despite improvements in data transparency and custody solutions since FTX.

We developed a proprietary risk matrix to quantify counterparty and operational risks across CeFi and DeFi. This includes:

• Probability of default scores for counterparties.
• Scenario analyses under different custody and insurance setups.
• Adjustments to performance metrics to reflect embedded risks.

Each strategy is then categorized by alpha source (e.g., arbitrage, trend capture) and platform (CeFi or DeFi). This allows benchmarking on both performance and risk-adjusted terms.

Our hybrid approach benchmarks external managers against the same operational standards we demand internally. Alignment through team co-investment often signals robustness.

Digital assets have unmatched alpha potential compared to TradFi, but prudent allocators must adjust exposures based on operational resilience and hidden risks.

Page 17 — Accessing Decentralized Finance Strategies as an Institutional Allocator (Allocator View)

Teddy Fusaro – President, Bitwise Asset Management

In March 2025, Bitwise made its first on-chain investment via Maple Finance, a milestone in institutional adoption of on-chain credit.

Why DeFi Lending Appeals to Institutions

• Transparent, capital-efficient, programmatically governed.
• Real-time yield opportunities with blockchain visibility.
• T+0 settlement, public smart contracts, real-time loan monitoring.

Challenges for Institutions

DeFi is not plug-and-play for regulated institutions. It must fit into risk, compliance, and operational frameworks.

Bitwise’s process included months of diligence:

• Assessing yield, collateral, and counterparty risks.
• Evaluating smart contract design, custody model, and compliance.
• Considering tax, accounting, and KYC/AML.
• Preparing documentation for auditors and regulators.

Key questions included:

• How are assets custodied?
• Are underlying loans secured on-chain?
• Does the protocol satisfy KYC/AML?
• How are positions valued for GAAP?
• What evidence do auditors need?

Outcome

Though resource-intensive, the effort allowed Bitwise to access on-chain credit without compromising institutional standards.

This space is growing rapidly, and those who build capability now will have a strategic advantage. Institutions willing to lean in gain not just early access but influence over how capital markets evolve in the digital age.

Page 18 — Tariffs, Protectionism, and the Catalysts for Crypto? (Allocator View)

Chris Solarz, CFA, CPA, CAIA – CIO, Amitis Capital

Trump’s tariffs have unleashed mayhem in global markets, destroying trillions in value. Investor confidence is shaken, raising fears of 1930s-style protectionism. Some argue it is high-stakes negotiation, but the results are clear: losses, volatility, and questions about the role of the U.S. dollar and Treasuries.

U.S. Treasury yields are higher than before “Liberation Day,” reflecting eroded safe-haven status.

What Role for Crypto?

• Liquidity to the rescue: Central banks can ease fiat, but they cannot print Bitcoin.
• Crypto is borderless: Protectionism impacts trade, but crypto remains globally accessible.
• Blockchain enables efficiency: Cost reductions, transparency, auditability, and automation through smart contracts.

Bitcoin vs. Altcoins

• Bitcoin’s strength comes from immutability, fixed supply, and decentralized governance.
• Altcoins are riskier, behaving like high-beta venture bets on tech infrastructure.

Outlook

Despite strong fundamentals (ETF approvals, stablecoin legislation, institutional adoption), macro headwinds have driven tokens down 25–80% YTD.

Trump’s pro-crypto rhetoric contrasts with market losses. Crypto adoption and infrastructure continue compounding. The future likely belongs to:

• Borderless assets with capped supply (Bitcoin).
• Tech-layer assets solving real problems (Ethereum, Solana, etc.).

Page 19 — Operational Due Diligence (Divider)

Section divider page.

Page 20 — In Volatile Times, Sound Valuations and Pricing Matter (Operational Due Diligence)

Vin Molino – COO & Head of Operational Due Diligence, Crypto Insights Group

Volatility can expose valuation weaknesses in crypto funds. Many managers lack detailed valuation policies, assuming administrators will price portfolios in all conditions. This can create problems during stress events.

Risks

• Inadequate valuation policies may create disputes, delayed NAVs, or audit issues.
• DeFi assets, locked tokens, and liquid venture can be especially problematic.
• Exchanges may broadcast prices that do not reflect reality; managers must decide if overrides are warranted.

What ODD Should Look For

A robust valuation policy should:

• Detail how assets are priced normally.
• Provide contingency methods during disruption.
• Clarify the manager’s ultimate responsibility for pricing.
• Ensure NAVs can be produced consistently, even under stress.

Key Point

Valuation is the manager’s job, not the administrator’s. Institutional diligence should confirm policies are clear, tested, and documented.

Page 21 — Institutionalizing DeFi: A Due Diligence Blueprint (Operational Due Diligence)

Olga Romanova – Independent Consultant, Vigillion Advisors

This quarter, we aim to emphasize the significance of a formal due diligence approach within digital assets, particularly DeFi strategies. For funds allocating to early-stage protocols, it is essential to develop a structured approach and maintain records of the review and approval process prior to asset deployment.

Elements of Operational Due Diligence on Protocols

• Team & Governance: Founders, developers, governance participants, capital structure, jurisdiction, and backers.
• Technology: Integrity and security of the stack, smart contract audits, infrastructure maintenance.
• Business Model: Economics, revenue streams, cost structures, sustainability of roadmap.
• Custody & Controls: Policies for digital custody, transfer controls, whitelisting, litigation history.
• Advisors & Partners: Role of external advisors, law firms, and technical consultants.
• Conflicts & Risks: Relationships among investors, DAOs, and service providers.

Best Practices

• Run full background checks (court records, sanctions lists, PEPs).
• Examine disaster recovery and business continuity policies.
• Document revenue-sharing models and treasury management.
• Review intellectual property protections to mitigate insider risk.

Documentation

A strong due diligence framework requires:

• A written memo of findings.
• A risk matrix with identified risks and mitigations.
• Supporting documents (org charts, audits, tokenomics).
• Committee sign-off with rationale.

Conclusion

Given the volatility and technical complexity of DeFi, institutional allocators must apply structured diligence to safeguard capital and reputation while identifying high-conviction opportunities.

Page 22 — Industry Perspective (Divider)

Section divider page.

Page 23 — When Crypto Meets Institutions (Industry Perspective)

Tira Grey – Managing Director, CoinDesk Institutional

The crypto industry has matured considerably over the past decade. Yet when institutions meet digital asset managers, the dynamic often resembles culture clash.

Tira compares it to a scene from E.T. — when Elliott’s younger sister screams upon meeting the extraterrestrial. That visceral fear mirrors the initial response many institutions have when first confronting crypto investments.

Four Cultural Shifts Needed for Institutional Capital Flow

1. Understanding LP Processes — Emerging GPs must grasp LP politics, committees, and procedures to compete.
2. Adapting Marketing Language — Replace acronyms and hyperbole with accessible language for investment committees.
3. Resisting Clickbait Media — Sensationalist headlines create reputational risk. Balanced coverage would help LPs and GPs.
4. Pushing Through Fear — Market uncertainty may be the best moment to reconsider conventional wisdom.

Institutions that adapt to these shifts can open doors to larger pools of capital.

Page 24 — On Chain Asset Management (Industry Perspective)

Sidney Powell – CEO, Maple

Maple Finance’s vision is to fuse blockchain efficiency with institutional stability. The goal is not to reinvent markets, but to build better infrastructure for them.

By April 2025, Maple reached $800M TVL. Products offered:

• BTC Yield (5.1% APY) — Transforming Bitcoin into a productive asset.
• USDC Yield (7–11% APY) — Overcollateralized, fixed-rate loans.

Why Institutions Pay Attention

• Loans are overcollateralized and fixed-rate, offering predictability.
• Products are compliant with Regulation D for accredited investors.
• Partnerships with major firms (Bitwise, CORE DAO) validate the model.

Outlook

Private credit is a $1.5T TradFi market, much of which may move on chain. Differentiation is key: enduring DeFi protocols will be those that solve real problems for institutions.

Maple is focused on building pragmatic, institutional-grade yield solutions designed to last across cycles.

Page 25 — Tools Supporting the Growth of Liquid Funds (Institutions and Protocols)

Mehdi Brahimi – Head of Institutional Business, L1
Dan Averbukh – CEO, validityBase
Matt Moravec – CEO, Satoshi Safe

Liquid funds anchor the digital-asset ecosystem, fueling expansion and connecting institutions to projects.

This quarter spotlights three enablers:

• validityBase — Builds tamper-proof, verifiable performance records for managers, enabling allocators to trust track records.
• L1 — Tokenizes fund strategies via compliant smart contracts, providing instant KYC, real-time NAV, and seamless investor access.
• Satoshi Safe — Develops tools to tackle DeFi operational challenges, from portfolio tracking to security.

Industry Takeaways

• Tokenization streamlines fund distribution and transparency.
• Verifiable audit trails reduce allocator concerns about cherry-picked results.
• DeFi adoption accelerates as operational bottlenecks are solved.

These tools actively shape the institutional infrastructure needed for the next phase of crypto fund growth.

Page 26 — Fund Manager Survey Insights (Divider)

Section divider page.

Page 27 — Insights from the Fund Manager Survey

On a monthly basis, CIG conducts surveys targeted toward liquid fundamental fund managers. These managers are living and breathing the digital asset markets. The results culminate into 10+ page reports representing 50+ funds and nearly $5B of AUM.

Key Highlights: Ecosystem Trends

• Highest focus remains on Solana, but Ethereum and Bitcoin follow closely while Hyperliquid gains significant share.
• Fund managers are still most focused on Solana, but many are shifting attention to ecosystems like Hyperliquid as it builds out its L1.

Bitcoin Strength

After oscillating through much of 2024, sentiment around Bitcoin’s relative strength has flipped decisively. Nearly 70% of survey respondents now anticipate BTC’s share of total crypto market value to climb over the next six months — almost triple the conviction seen a year ago.

Drivers include:

• Defensive rotation to BTC as the most liquid asset.
• Institutional flows concentrated in BTC ETFs.
• Weakening confidence in underperforming alt themes.

Institutional Adoption Beyond BTC

Managers split between ETH and Solana as the runner-up asset for institutional adoption after BTC. Nearly half expect ETH, while a growing number nominate Solana, especially as it prepares for a potential ETF.

Page 28 — Trump’s Impact on the Liquid Token Market Structure (Fund Manager Survey Insights)

Across January to April 2025 surveys, sentiment toward the Trump administration is overwhelmingly constructive.

Key Findings

• Confidence is high that Washington is shifting from adversarial oversight to pragmatic rule-making.
• Managers expect upside surprises:
  • Clearer token classifications.
  • Pragmatic stablecoin legislation.
  • Credible pathways to spot-market products.

Trump’s geopolitical moves reinforce this view. By emphasizing U.S. competitiveness in strategic technologies, they are seen as catalysts for institutional adoption rather than impediments.

Implications

Managers frame the Trump term as a rare window for:

• Regulatory clarity.
• Pro-business rhetoric.
• Unlocking new liquidity pools.
• Drawing innovation onshore.

Allocators are already nudging portfolios toward policy-driven upside in anticipation.

Page 29 — Conclusion

Together, we are building the relationships and strategies that will define this transformative space.

Liquid funds now serve as catalysts in the crypto asset arena, fueling expansion, igniting innovation, and fostering strategic partnerships.

Accelerating institutional involvement and a renewed regulatory outlook make 2025 a defining moment for managers to convert passive beta into differentiated alpha.

As operational rigor sharpens and market avenues multiply, the groundwork for a more resilient digital asset future is rapidly taking shape.

Page 30 — Special Thank You

Allocators & Industry Experts

• Jeff Dorman, CFA — Chief Investment Officer, Arca
• Chris Solarz, CFA, CPA, CAIA — Chief Investment Officer, Amitis Capital
• Kevin Mills — Head of Research, Triton Digital
• Cyril Castelli — CEO, RCube Asset Management
• Tyler Evans — CIO, UTXO Management
• Teddy Fusaro — President, Bitwise Asset Management
• Jeff Embry — Managing Partner, Globe 3 Capital
• Vin Molino — COO & Head of Operational Due Diligence, Crypto Insights Group
• Andrew Woodruff, CFA — CIO, Black Lotus Capital
• Olga Romanova, CFA, CPA — Independent Consultant, Vigillion Advisors
• Chris Sullivan, CMT — Co-Portfolio Manager, Hyperion Decimus
• Tira Grey — Managing Director, CoinDesk Institutional
• Tony Fenner-Leitão — President, Cambrian Asset Management Inc.
• Sidney Powell — CEO, Maple
• Mehdi Laurent Akkar — Co-Founder & CEO, Eltican Asset Management
• Mehdi Brahimi — Head of Institutional Business, L1
• Evgeny Gokhberg — Managing Partner, Re7 Capital
• Dan Averbukh — CEO, validityBase
• Vadim Khramov — CIO, Edge Capital Management
• Matt Moravec — CEO, Satoshi Safe
• Tom Kral — CEO, LM5 Capital
• Quinn Thompson — CIO, Lekker Capital
• David van Goudoever — Co-Founder, M1 Capital
• Ed Tolson — CEO, Kbit
• Shiliang Tang — President, MNNC Group
• Christophe Sfeir — CEO, Constella
• Laura Vidiella del Blanco — Head of Investor Relations, Digital Assets, VanEck
• Olivia Nguyen — Head of Growth, Outerlands Capital

Page 31 — Disclaimer (Continued)

The services and content are provided for informational purposes only. Information and data included in the content are obtained from various sources and are provided on an "as is" basis. The company does not perform any additional audit or verify the information provided by third parties. The company is not responsible for and does not warrant the correctness, accuracy, or reliability of the data in the content. The company does not warrant that the delivery of the data relating to the content will be uninterrupted or free from any viruses or other harmful components or defects.

The information in the company content does not constitute an offer, solicitation or a recommendation to buy or sell any security or financial product or digital asset or crypto asset or vehicle whatsoever or any type of tax or investment advice or recommendation.

Past results of any constituent responses within the content is no indication of future results. The company does not act as an investment advisor or fiduciary. The company does not sponsor, endorse, sell, promote or manage any investment products or instruments, including investment products or instruments offered by third parties that are based on the content.

The services are provided on an as-is and as-available basis. You agree that your use of the services will be at your sole risk. To the fullest extent permitted by law, we disclaim all warranties, express or implied, in connection with the services and your use thereof, including, without limitation, the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.

We make no warranties or representations about the accuracy or completeness of the services’ content or the content of any websites or mobile applications linked to the services and we will assume no liability or responsibility for any:

1. Errors, mistakes, or inaccuracies of content and materials.
2. Personal injury or property damage of any nature whatsoever, resulting from your access to and use of the services.
3. Any unauthorized access to or use of our secure servers and/or any and all personal information and/or financial information stored therein.
4. Any interruption or cessation of transmission to or from the services.
5. Any bugs, viruses, Trojan horses, or the like which may be transmitted to or through the services by any third party.
6. Any errors or omissions in any content and materials or for any loss or damage of any kind incurred as a result of the use of any content posted, transmitted, or otherwise made available via the services.

We do not warrant, endorse, guarantee, or assume responsibility for any product or service advertised or offered by a third party through the services, any hyperlinked website, or any website or mobile application featured in any banner or other advertising, and we will not be a party to or in any way be responsible for monitoring any transaction between you and any third-party providers of products or services.

As with the purchase of a product or service through any medium or in any environment, you should use your best judgment and exercise caution where appropriate.

To the maximum extent permissible by applicable law, the company expressly disclaims any and all warranties, express or implied, or otherwise, including, without limitation, any warranty of merchantability, fitness for a particular purpose and non-infringement. You assume all risk of damage or loss resulting from the use of the services and content.

Limitations of Liability

In no event will we or our directors, employees, or agents be liable to you or any third party for any direct, indirect, consequential, exemplary, incidental, special, or punitive damages, including lost profit, lost revenue, loss of data, or other damages arising from your use of the services, even if we have been advised of the possibility of such damages.

Notwithstanding anything to the contrary contained herein, our liability to you for any cause whatsoever and regardless of the form of the action, will at all times be limited to the amount paid, if any, by you to us during the three-month period prior to any cause of action arising.

Certain United States state laws and international laws do not allow limitations on implied warranties or the exclusion or limitation of certain damages. If these laws apply to you, some or all of the above disclaimers or limitations may not apply to you, and you may have additional rights.

Indemnification

You agree to defend, indemnify, and hold us harmless, including our subsidiaries, affiliates, and all of our respective officers, agents, partners, and employees, from and against any loss, damage, liability, claim, or demand, including reasonable attorneys’ fees and expenses, made by any third party due to or arising out of use of the services, including but not limited to:

1. Breach of these Legal Terms.
2. Any breach of your representations and warranties set forth in these Legal Terms.
3. Your violation of the rights of a third party, including but not limited to intellectual property rights.
4. Your violation of any laws, rules, regulations, orders, or statutes.
5. Any overt harmful act toward any other user of the services with whom you connected via the services.

We reserve the right, at your expense, to assume the exclusive defense and control of any matter for which you are required to indemnify us, and you agree to cooperate, at your expense, with our defense of such claims. We will use reasonable efforts to notify you of any such claim, action, or proceeding which is subject to this indemnification upon becoming aware of it.

Please read this disclaimer and the disclaimer on page 2 carefully before utilizing any information derived from this report.

Page 32 — Thank You

Thank You
The CIG Team
April 2025

Frequently Asked Questions (FAQ)

What is the Hedge Fund Outlook 2Q25?
It is a research report by Crypto Insights Group (CIG) covering allocator sentiment, fund manager perspectives, operational due diligence frameworks, and market insights shaping digital asset hedge funds in the second quarter of 2025.

Why should allocators pay attention to this report?
The report highlights allocator views on operational excellence, fundraising momentum, and the rise of tokenization and DeFi strategies. It provides transparency into how managers are positioning for institutional adoption.

What trends are shaping hedge funds in 2025?
Key themes include stress tests on risk management, demand for operational readiness, allocator preferences for BTC-denominated share classes, and the institutionalization of DeFi.

What risks do managers and allocators see in 2025?
Major risks include global trade tensions, U.S. tariff policies, valuation pressures during volatility, and operational vulnerabilities in fund structures.

How does CIG support allocators and managers?
CIG offers an Institutional Allocator Portal to identify, diligence, and monitor liquid funds, along with monthly research and benchmarking tools covering the digital asset fund universe.

‍