Brevan Howard’s Crypto Fund Plunges 30% in Worst Year Since Inception

The institutional cryptocurrency landscape faced a sobering reality check in 2025 as Brevan Howard’s BH Digital Asset Fund reported a staggering 29.5% loss. This decline represents the fund's worst annual performance since its inception, according to reports from the Financial Times. The magnitude of the loss is particularly striking when compared to the broader market benchmark; Bitcoin (BTC) ended the year down approximately 6%, meaning the actively managed fund underperformed its primary asset class by nearly 24 percentage points. This divergence raises critical questions about the strategies employed by high-fee institutional managers in the digital asset space.

Brevan Howard, a titan in the global macro hedge fund world, launched its digital asset division with the intent of providing sophisticated, institutional-grade exposure to the burgeoning crypto market. However, the 2025 results suggest that the fund may have been caught on the wrong side of market volatility or heavily exposed to underperforming altcoins. While Bitcoin showed relative resilience despite a broader 'rout' in the sector, many smaller-cap tokens and decentralized finance (DeFi) protocols suffered more severe drawdowns. The fund's performance indicates that its active 'alpha-seeking' strategies—which often involve leverage, derivatives, and diverse token allocations—failed to provide the downside protection or outperformance that institutional investors typically expect for the high management and performance fees charged by such vehicles.

“

The institutional cryptocurrency landscape faced a sobering reality check in 2025 as Brevan Howard’s BH Digital Asset Fund reported a staggering 29.5% loss.

Industry analysts point to 2025 as a 'terrible year' for crypto sentiment, characterized by wavering bull market momentum and a lack of clear catalysts following the initial excitement of spot ETF approvals in previous years. For a macro-focused firm like Brevan Howard, the inability to navigate these shifts suggests a potential misalignment between traditional macro trading frameworks and the idiosyncratic liquidity cycles of the crypto market. The underperformance is likely to trigger a wave of redemptions as institutional allocators re-evaluate the value proposition of active crypto hedge funds versus lower-cost passive options like spot ETFs.

Looking ahead, the fallout from this performance could lead to a strategic pivot for BH Digital. Historically, when flagship funds at major firms face such significant drawdowns, they often undergo a period of deleveraging or a narrowing of focus to more liquid assets like Bitcoin and Ethereum. Furthermore, this development may cool institutional appetite for 'multi-strategy' crypto funds in the short term, as investors prioritize capital preservation over complex, high-risk strategies that have proven vulnerable during market corrections. The industry will be watching closely to see if Brevan Howard adjusts its risk management protocols or if this marks the beginning of a broader retreat from active crypto management by traditional hedge fund giants.

Ultimately, the 2025 performance of the BH Digital Asset Fund serves as a cautionary tale for the 'institutionalization' of crypto. It underscores that even with the backing of a world-class macro trading infrastructure, the digital asset market remains an unforgiving environment where traditional hedging techniques can be overwhelmed by sudden shifts in liquidity and sentiment. As the market matures, the pressure on active managers to justify their fees through consistent outperformance will only intensify, especially as passive investment vehicles become more accessible to the very institutions Brevan Howard seeks to serve.