March 31, 2025
Commentary
Year-to-date to March 31, the Ninepoint Crypto and AI Leaders ETF generated a total return of -25.74%. For the month, the Fund generated a total return of -12.16%.
Ninepoint Crypto And Ai Leaders ETF - Compounded Returns¹ As of March 31, 2025 (Series ETF CAD- TNK) | Inception Date: January 27, 2021
1M |
YTD |
3M |
6M |
1YR |
3YR |
Inception |
|
|---|---|---|---|---|---|---|---|
Fund |
-12.16 |
-25.74 |
-25.74 |
-1.28 |
-11.23 |
1.84 |
8.68 |
March proved to be a challenging month, dominated by macroeconomic and geopolitical uncertainty stemming from escalating tensions caused by President Trump’s trade war. Despite a wave of positive news for the crypto industry, it was largely overshadowed by a sharp pivot away from risky assets as investors prioritized safety in an increasingly risk-off environment.
Having said that, looking through the current tariff-induced crisis, we see green shoots emerging that could set us up for a strong second half, if the tariff clouds part.
For a long time, institutions, while interested, were held back by regulatory uncertainty and past regulation-by-enforcement approaches from past administrations
For example, long-time regulatory headwinds are now turning into tailwinds. The U.S. Federal Deposit Insurance Corporation (FDIC) clarified that supervised institutions could engage in crypto-related activities without acquiring prior approval. The Office of the Comptroller of the Currency (OCC) clarified that banks could custody cryptoassets, hold stablecoin reserves, and settle payments on blockchain networks. The Securities and Exchange Commission (SEC) clarified that proof-of-work (PoW) crypto miners do not involve the offer or sale of securities. The Senate Banking Committee approved the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) with bipartisan support, and the House Financial Services Committee advanced the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE Act). Pro-crypto SEC Chair nominee Paul Atkins passed through the Senate Banking Committee.
For a long time, institutions, while interested, were held back by regulatory uncertainty and past regulation-by-enforcement approaches from past administrations. Now, with a pro-crypto administration and an SEC that has already delivered on several key promises to the industry, including the ones mentioned above, we’ve seen an influx of announcements from traditional banks, payment processors, brokerages, and more on planned crypto initiatives—all citing the regulatory shift as the catalyst for finally coming off the sidelines and participating. Bank of America, Morgan Stanley, Charles Schwab, Fidelity, and SoFi are just a few examples.
A crypto IPO frenzy could also be upon us, with USDC stablecoin issuer Circle likely to catalyze it. The hope is that an upcoming Circle IPO could mark the beginning of a broader trend—a crypto IPO season that brings more private companies to public markets. Market volatility, much of it tied to tariff uncertainty, has kept many IPOs grounded. Deal volume is down year over year. High-profile offerings like the AI data center CoreWeave have had to be repriced. Others, like Fold (FLD), are listed via SPAC (special acquisition corporation – an alternative to IPO) to a muted response. Still, there are good reasons to be bullish on crypto IPOs. There’s a backlog of quality crypto firms ready to file. Many had planned to go public during the last cycle but were delayed by regulatory uncertainty. Now they’re well-positioned. eToro has already filed. Others like Bullish, Gemini, Kraken, Anchorage, Chainalysis, Figure, MoonPay, Ripple, and Consensys are rumoured to be waiting in the wings. Crypto M&A in the first quarter was strong, despite the slow start to IPOs. Kraken acquired NinjaTrader. Coinbase is eyeing Deribit. There’s activity in this space already, spurred no doubt by the friendlier regulatory environment, suggesting that when the IPO window reopens, crypto firms may be the first to go through.
A growing roster of publicly traded crypto companies is a win for the industry and for investors. Many institutions and retail investors alike want exposure to the growth of digital assets but can’t or won’t hold crypto directly. Public equities provide an on-ramp. Going public also brings transparency. IPO filings require companies to open their books, submit to investor scrutiny, and meet high standards of disclosure and governance. This builds trust—not just with investors, but with customers, partners, and regulators.
Cryptoassets like Bitcoin were for a time the darling of the so-called “Trump Trade” – the basket of financial assets that were supposed to benefit from a Trump presidency – soaring in the aftermath of the election, as Trump pledged to completely overhaul the government’s approach to the industry. While cryptoasset prices have come down with the broader markets, Bitcoin is still up almost 20% since the election. That is more than gold, even with the recent run it had, and of course, the S&P 500 and Nasdaq which are in negative territory. Questions remain if crypto-related equities will benefit from this decoupling or get swept up in the selloff. As such, we remain cautious. We’ve positioned the fund to be overweight cash, increased the Bitcoin weighting, and sold down some small-cap positions and more volatile equities. Drawdowns like the current are not uncommon for bull markets. For Bitcoin and cryptoassets, bull market drawdowns are common on the road to fresh all-time highs. Consider this: on five separate occasions from 2019-2021, Bitcoin declined by 25% or more before reaching its all-time high. Currently, Bitcoin has corrected 20% from this cycle’s high set in January.
While it’s hard not to be cautious short term, we remain bullish in our long-term outlook.
Alex Tapscott, CFA
Ninepoint Partners