Monthly Manager Commentary: May 2025

Multi-Strategy Fund Performance

The Fund posted a strong gain of 10.4% in May, closely tracking bitcoin’s 11.2% monthly return. Performance was bolstered by Ethereum, which delivered its best monthly performance in over a year, emerging as the top contributor. The broader market benefited from a more constructive backdrop, driven by renewed institutional interest and regulatory momentum. Notable developments included state-level bitcoin reserve initiatives and the passage of the GENIUS Act, signaling increased policy support for digital assets. Since the volatility triggered by unexpected tariff announcements in February, our quantitative strategies have continued to evolve. Enhancements in regime detection and signal calibration have sharpened our ability to respond to rapidly shifting conditions. These improvements helped drive strong positioning across major crypto assets and underscore our commitment to disciplined, adaptive execution.

	Multi-Strategy Fund	Bitcoin
May Gross Performance	10.4%	11.2%

Engineering Insights and Updates

This month, our research team made significant progress in two advanced techniques designed to enhance the adaptability and precision of our quantitative trading strategies: meta models and meta signal models.

Meta models function as adaptive strategy selectors, dynamically identifying the most suitable trading approach based on prevailing market conditions. For example, in periods of heightened volatility, the model may favor volatility-centric strategies over value or mean reversion, using performance metrics such as rolling Sharpe ratios to guide these decisions. This enables the portfolio to remain aligned with current regime dynamics, rather than relying on static model assumptions.

Meta signal models, on the other hand, operate at the signal level. They assign confidence scores to individual trade signals—such as a 70% probability on a bitcoin long—based on a range of inputs including historical hit rates, signal decay, and market liquidity. These probabilistic assessments allow for more intelligent position sizing and capital allocation, reinforcing high-conviction trades while dampening noise.

Together, we believe these innovations will enhance the agility and robustness of our portfolio construction process. By intelligently selecting strategies and scaling exposures according to signal quality, we aim to improve risk-adjusted performance while reducing the risk of overfitting. Backtests across varying market environments have shown encouraging results, and we are now focused on refining these models for deployment in live trading.

These developments reflect our continued commitment to cutting-edge research with a practical focus: building smarter, more resilient systems that deliver sustainable alpha.

Market Commentary

The crypto markets carried their strong April momentum into May, with notable gains across key assets and growing signs of structural maturity in the space. Bitcoin led the charge once again, breaking through the psychologically significant $100,000 mark early in the month and reaching a new all-time high of $112,000 on May 22. Ethereum followed with an impressive performance of its own, rising nearly 50% to close the month at $2,500, after briefly touching $2,700. This surge was largely driven by the successful rollout of the long-awaited Pectra upgrade on May 7—Ethereum’s most substantial technical update since The Merge. Pectra introduced several important changes, including more flexible account structures, improved data storage efficiency, and increased staking capacity for network validators.

This strong market performance was further supported by a favorable macroeconomic and geopolitical backdrop. A surprisingly strong U.S. jobs report helped ease concerns about economic softening, while positive developments on the international front—including President Trump’s encouraging comments on a potential U.S.-UK trade deal—added to investor optimism. On the monetary side, renewed worries about long-term U.S. fiscal sustainability were amplified by Moody’s downgrade of U.S. sovereign debt and a lackluster 20-year Treasury bond auction. As confidence in traditional safe-haven assets wanes, more investors are turning to alternative stores of value, with bitcoin increasingly viewed as a potential contender for a global reserve asset role.

Regulatory progress in the U.S. also contributed to the positive sentiment. In a notable development, New Hampshire and Arizona passed legislation establishing Strategic Bitcoin Reserves—marking the first time U.S. states have formally added bitcoin to their sovereign financial strategies. Texas appears likely to follow, and at least 18 other states are actively reviewing similar proposals. Meanwhile, stablecoin regulation took a major step forward with the Senate’s approval of the GENIUS Act, a comprehensive bill that is expected to become law before the August recess. This legislation aims to bring much-needed clarity and oversight to a crucial part of the digital asset ecosystem.

Despite what could be considered one of the most favorable environments in crypto’s history—rising institutional interest, regulatory engagement, and a market-friendly political backdrop—the overall public response to bitcoin’s new high has been surprisingly muted. Online search data suggests that general interest in bitcoin remains far below previous peaks. Analysis by VanEck’s Matthew Sigel revealed that U.S. Google searches for “Bitcoin” were at less than half the level seen during the late-2024 highs, indicating that the current rally is being driven primarily by institutional rather than retail investors.

This dynamic is shaping a different kind of market cycle—one that’s quieter, more orderly, and potentially more sustainable. Institutional participation via traditional financial infrastructure, such as wealth management platforms and spot ETFs, appears to be cushioning volatility and reducing the sharp price swings that characterized past rallies. At the same time, the relative absence of retail enthusiasm leaves room for future growth. When broader public interest eventually returns—whether due to price momentum or broader adoption trends—it could provide the fuel for a powerful second wave of capital inflows.

As we move into June, the outlook for crypto remains exceptionally strong. Bitcoin’s growing prominence in the global financial system continues to gain recognition, while meaningful regulatory progress is laying the groundwork for long-term stability and growth. Although May’s rally unfolded with relatively little fanfare, it’s important to note that crypto has already outpaced just about every major asset class so far this year. With institutional adoption deepening and retail interest still largely on the sidelines, the stage is set for an even more promising second half. The conditions for continued strength and sustainable growth are clearly taking shape.

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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