Monthly Manager Commentary: October 2025

Multi-Strategy Fund Performance

The Fund declined 10% in October largely due to President Trump’s unexpected announcement of 100% tariffs on Chinese imports, which triggered one of the largest liquidation events in crypto history and drove asset prices down 10–30% within days. This exogenous shock—unrelated to technical indicators or on-chain fundamentals—negatively impacted our long-only positions, particularly in ETH and SOL, and challenged our algorithmic models’ ability to adapt to non-market-driven volatility. However, with geopolitical tensions easing following a preliminary trade framework between President Trump and President Xi, and monetary policy remaining highly accommodative with rate cuts and the end of quantitative tightening, we view October’s sell-off as a short-term deleveraging event rather than a structural shift. We maintain our conviction that the crypto market will recover and move toward new highs in the months ahead.

	Multi-Strategy Fund	Bitcoin
October Gross Performance	-10.3%	-4.0%

Market Commentary

October proved to be one of the more dramatic months in recent crypto history —  one that broke from traditional seasonal optimism and tested the structural resiliency of this cycle. While past Octobers have delivered outsized returns, this year’s volatility served as a reminder that even within a bull market, macro shocks can swiftly reshape sentiment and risk dynamics.

Historically, October has been one of crypto’s best-performing months, and the early data suggested a repeat performance. In the first week, bitcoin-focused investment products attracted record inflows of roughly $3.6 billion, helping push BTC to new all-time highs near $126,000 and reinforcing expectations of another strong “Uptober.”

That optimism reversed abruptly on October 10, when President Donald Trump announced 100% tariffs on Chinese imports, coupled with sweeping export controls on critical software. The announcement triggered a global risk-off move, sparking one of the largest single-day liquidation cascades in crypto’s history. According to Coinglass data, 1.6 million traders were liquidated, with over $19 billion in leveraged positions unwound.

Bitcoin fell as much as 8–10%, briefly touching $105,000, while altcoins suffered steeper losses. The magnitude of the move was amplified by thin weekend liquidity and crypto’s always-on trading environment — with traditional markets closed, digital assets became the open valve for macro anxiety.

It’s important to note that this was not a crisis of crypto fundamentals. Digital assets face no tariffs or customs bottlenecks — their intrinsic properties remain unchanged. Instead, what we witnessed was a mechanical deleveraging: a rapid unwinding of speculative leverage among overextended short-term traders. In other words, this was a structural reset, not a fundamental breakdown. Such mechanically driven corrections are not new to crypto markets; in fact, they have been a recurring feature of past bull cycles. This episode mirrors prior bull-market corrections such as the May 2021 flash crash and the August 2024 yen carry-trade unwind — fast, mechanical, and ultimately healthy. Each reset has historically rebalanced speculative excess and set the stage for further appreciation.

Importantly, despite the intensity of these liquidations, the underlying market infrastructure and investor positioning showed notable resilience. Even amid the liquidation cascade, structural support held firm. Spot Bitcoin ETFs saw only marginal outflows, and BlackRock’s IBIT notably recorded positive inflows during the drawdown. On a 30-day rolling basis, Bitcoin ETF inflows remain steady at roughly 50,000 BTC per month — a historically robust level. Capital deployment has moderated, but we see no systemic selling pressure.

Several macro tailwinds continue to support optimism as we approach year-end. Geopolitical risk has begun to ease following a preliminary framework reached between President Trump and President Xi, which helped defuse immediate trade tensions. At the same time, monetary policy remains firmly on an accommodative path: the Fed delivered the expected rate cut this month, and markets are now pricing in another 25 basis-point reduction in December. The formal conclusion of quantitative tightening (QT) further underscores the Fed’s intent to loosen financial conditions and expand system liquidity.

In our assessment, this is not the start of a bear market, but a pause within an ongoing structural uptrend. Forced deleveraging has restored more disciplined positioning, reduced tail risks, and reset sentiment. With supportive macro policy, sustained institutional inflows, and solid on-chain fundamentals, we believe the structural integrity of this bull market remains intact.

While October failed to live up to its “Uptober” reputation, the correction appears constructive rather than destructive — a cleansing event that strengthens the market’s foundation.

Looking ahead, we remain cautiously optimistic. We expect continued volatility, particularly as macro headlines and liquidity dynamics evolve, but we are confident that the fundamental bullish narrative — institutional adoption, ETF inflows, and favorable monetary policy — remains firmly in place. We continue to monitor on-chain data, leverage metrics, and macro developments closely, poised to navigate both risk and opportunity.

Sincerely,

The Blockforce Team

Disclaimer:  This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. 

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