Resilience and Optimism in a Volatile Crypto Market

The month of November proved to be particularly challenging for the digital asset sector, marking the steepest monthly decline since June 2022.

Despite this difficult scenario, Edge DeFi Fund demonstrated remarkable resilience, maintaining performance in line with expectations and delivering positive results to investors.

Closing estimates for November indicate a net return ranging between +1.2% and +1.5% for investors in USD and between +0.7% and +1.0% for those who chose share classes denominated in BTC, ETH, and other digital assets.

A key element of this performance is the advantage that token-denominated share classes (BTC/ETH) gain when asset prices are lower: this allows the fund to accumulate underlying assets at more favorable levels, strengthening investors’ positions in the long term.

Global Markets: Between Corrections and Solid Fundamentals

The Correction of US Stocks and the Impact on Cryptocurrencies

The recent sell-off affecting U.S. tech and fintech stocks has also impacted the cryptocurrency sector, intensifying the ongoing correction.

According to Edge Capital’s analysis, sales by several Digital Asset Treasuries (DATs), whose securities were traded below the net asset value (NAV), have exerted additional pressure on the market.

Despite these turbulences, the overall picture of the U.S. stock markets, including the S&P 500 index, remains solid. Valuations are supported by exceptionally high earnings and positive guidance for the future.

No signs of structural imbalances are emerging either in the United States or in Europe: credit markets, both for households and businesses, appear healthy and not excessively leveraged. The growth of private credit is interpreted as a natural consequence of the robustness of the U.S. economy.

Monetary Policy and Macroeconomic Outlook

On the interest rate front, the Federal Reserve does not seem inclined to proceed with imminent cuts, due to persistent inflation.

However, the U.S. macroeconomic context remains positive, and the recent correction in the stock markets is considered a natural profit-taking rather than the start of a systemic crisis.

Cryptocurrencies: DAT Sales and Controlled Leverage

Analysis of the Recent Correction in the Crypto Market

The digital asset sector has experienced a deeper correction compared to U.S. stocks, partly due to the overall market weakness and partly due to forced or strategic sales by DATs.

Several holders of BTC and ETH listed on NASDAQ have seen their shares trade below NAV, prompting some management teams to sell cryptocurrencies and repurchase their own shares.

The strong Ethereum rally recorded at the beginning of 2025, driven by DAT purchases, has largely dissipated, bringing cryptocurrency valuations back to more normal levels. A reassuring aspect is the low level of leverage remaining after the October liquidations, which helps to reduce systemic risk.

Future Prospects and Risks

While it is difficult to take a clear directional stance at current levels, Edge Capital anticipates that some sales by selected DATs may continue, with potential pressure on entities like MicroStrategy, which is significantly exposed at the balance sheet level.

However, a widespread liquidation of DATs seems unlikely, unless stock prices deviate significantly from the NAV.

Edge DeFi Fund: November Performance and Strategies

Performance and Trading Activity

Despite the volatility and the decline in digital asset prices, the fund’s performance remained solid and in line with expectations.

Most of the trading operations conducted during the month generated fully realized returns, without resorting to locked tokens or points. The basis trades between centralized and decentralized exchanges continued to deliver good results, while the portfolio maintains a series of stable and yield-generating positions.

Throughout November, Edge DeFi Fund was approached by several new projects that proposed interesting TVL-provision (Total Value Locked) opportunities, which are currently under evaluation. The fund is currently fully allocated and has not significantly increased leverage, maintaining a focus on high-quality opportunities.

Cautious Optimism for December

Looking ahead, the Edge Capital team sees a promising pipeline of potential operations leading up to December.

The modest recovery in digital asset prices represents an additional support factor, as it tends to enhance the returns of yield farming activities and widen the spreads of basis trades during reflation periods.

Overall, the fund maintains a cautiously optimistic outlook for December, trusting in a better performance compared to November due to market stabilization.

Investment Deadline: December 1st

The deadline for the investment window on December 1 is approaching (final date is November 30). Interested investors are invited to contact the Edge Capital operations team for assistance with the onboarding process.

Conclusion: Trust in Strategy and Attention to Opportunities

In a volatile and rapidly evolving market context, Edge DeFi Fund stands out for its adaptability and the robustness of its investment strategies.

Active management, focus on yield opportunities, and prudence in the use of leverage are the pillars on which investor trust is built.

With a well-defined pipeline of operations and an optimistic outlook for the near future, the fund is preparing to face December with renewed determination and attention to market dynamics.