Brevan Howard's Crypto Fund: A 30% Loss in a Record ETF Year

The numbers tell a brutal story. Brevan Howard's crypto fund lost 29.5% of its value in 2025, its worst performance since its inception in 2021. That catastrophic failure stands in stark contrast to the broader macro market, where the hedge-fund industry as a whole generated an estimated $543 billion in gains-an all-time record. While the firm's flagship macro fund eked out a mere 0.8% gain, peers like Bridgewater and Discovery Capital posted double-digit returns.

The underperformance was especially glaring against the asset it was supposed to track. Bitcoin itself only fell 6% in the period, meaning the fund not only failed to capture the market's modest rally but also lost nearly five times more than the benchmark. This divergence highlights a strategic misfire, as the fund's holdings in crypto tokens and related companies underperformed the underlying digital asset.

The context is one of extreme market volatility that rewarded nimble macro traders. The year was defined by aggressive central bank policy, geopolitical shocks, and sharp currency moves-conditions that fueled the industry's historic profit surge. Brevan Howard's rigid playbook, heavily focused on interest rates and FX swaps, appears to have backfired, erasing prior gains in January alone. The result is a firm missing out on a feast while its crypto unit suffered a historic loss.

The Macro Context: A Year of Record Profits

The market conditions of 2025 were tailor-made for successful macro trading, making Brevan Howard's failure even more pronounced. The hedge-fund industry as a whole generated an estimated $543 billion in gains, an all-time record fueled by unprecedented volatility from geopolitical events and aggressive central bank policy changes. This turbulence created strong, directional trends that nimble managers exploited for outsized returns.

The contrast with peers is stark. While Brevan Howard's flagship Master Fund eked out a mere +0.8% gain, its two largest funds-Alpha Strategies and Master-finished the year with returns of 8% and 0.8%, respectively. In fairness, even that modest performance was a step up from its catastrophic crypto fund loss. The real winners were those who capitalized on the chaos. Bridgewater's flagship Pure Alpha posted about +33%, and Discovery Capital's macro fund returned roughly +36%. Smaller peers like Rokos and D.E. Shaw's macro arm also crushed Brevan's results. The driver was clear: extreme events created strong trends in rates, commodities, and currencies. Brevan Howard's rigid playbook, heavily focused on interest rates and FX swaps, appears to have backfired. Its currency-trade losses early in the year were a drain, while its smaller, more flexible Emerging Markets strategy-able to capture local currency rallies-delivered double-digit gains. In a year where most macro managers earned double-digit profits, Brevan Howard's main funds barely kept pace with inflation, missing the feast while its crypto unit suffered a historic loss.

Catalysts and Risks: The Crypto ETF Surge

The primary driver of the crypto market's divergence from macro trends was a surge in institutional adoption, specifically through exchange-traded products. Crypto ETFs attracted $29.4 billion in inflows through August 11, 2025, creating a powerful, new source of demand that was largely disconnected from traditional macro flows. This expansion was enabled by a wave of regulatory breakthroughs, including the GENIUS Act establishing a federal stablecoin framework and a pivotal SEC ruling that allowed more efficient in-kind creations and redemptions for ETFs.

This institutional catalyst created a clear price action that Brevan Howard's crypto fund failed to capture. While the ETF-driven rally propelled assets like the iShares Bitcoin Trust (IBIT) to a 28.1% return year-to-date, the fund's holdings in crypto tokens and related companies underperformed the underlying digital asset. The firm's 24/7 global infrastructure, designed to mirror the crypto market's round-the-clock nature, was not enough to navigate this specific, ETF-fueled surge.

The contrast highlights a strategic vulnerability. Brevan Howard's crypto unit appears to have been positioned for a different kind of market-perhaps one driven by spot trading or project-specific news-while the dominant trend was a massive, rule-of-law-driven institutional inflow. This misalignment underscores the risk of a rigid, infrastructure-heavy approach in a market where the primary catalyst is regulatory and product-driven adoption, not just trading volume.