Monthly Manager Commentary: January 2026

Multi-Strategy Fund Performance

In January 2026, the Fund delivered a return of -7.3%, outperforming bitcoin, which declined -10.2% over the same period, amid a volatile and challenging market environment. Early-month trading was relatively orderly, but risk assets sold off sharply following the January 18 announcement of additional trade tariffs, which triggered a broad reduction in risk appetite across crypto markets. Conditions deteriorated further into month-end as intense sell pressure and forced liquidations accelerated downside moves. Despite these headwinds, the Fund’s systematic trading algorithms effectively reduced exposure during periods of heightened volatility and liquidity stress, helping to minimize drawdowns and preserve capital relative to the broader market.

Market Commentary

After a quiet, range-bound holiday period, bitcoin began the month with a strong rally, rising from the low $90,000s toward $97,000 and briefly pushing total digital asset market capitalization close to $3.4 trillion. The initial advance was supported by improving liquidity conditions, renewed optimism around institutional adoption, and relatively clean market positioning following December’s consolidation. Momentum, however, proved fleeting, and the rally ultimately failed to sustain itself.

The inflection point came around January 18, when renewed trade-war rhetoric from the United States triggered a broad pullback across global markets. President Trump raised the prospect of additional tariffs on several European countries amid escalating political tensions, reviving concerns about global growth and cross-border trade. While the fundamental outlook specific to digital assets had not materially deteriorated, crypto markets were not insulated from the resulting shift away from risk. Bitcoin reversed sharply, with major assets such as Ethereum and Solana declining in tandem as investors reduced exposure across high-beta assets.

Selling pressure intensified over the final weekend of the month as risk-off sentiment accelerated further. Bitcoin fell to lows near $75,000, its weakest level in several months, triggering approximately half a billion dollars in leveraged liquidations. Forced deleveraging amplified downside volatility, spilling into the broader market and driving heavy losses across major altcoins, including Ethereum.

Notably, traditional defensive assets failed to provide shelter during this episode. Precious metals, typically viewed as safe havens, experienced sharp volatility of their own, with gold and silver posting some of their largest single-day declines in years. Gold fell by double digits from recent highs before stabilizing modestly. Weakness also spread into traditional financial markets, as U.S. equity futures declined Sunday night, with the S&P 500, Nasdaq, and Dow all moving lower. The simultaneous drawdown across crypto, metals, and equities underscored a broader reassessment of risk rather than asset-specific stress.

Taken together, the late-month sell-off represented a rare, synchronized bout of volatility across asset classes, driven by investors seeking to reduce exposure and cover leveraged positions heading into February.

Stepping back, January 2026 reinforced a theme we have emphasized consistently: short-term price movements in crypto are increasingly driven by global macroeconomic forces, even as the long-term structural foundations of the asset class continue to strengthen.

Sincerely,

The Blockforce Team

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