TL;DR
- Brevan Howard’s BH Digital Asset fund fell 29.5% in 2025, its steepest annual decline since launching in 2021, according to a Financial Times report.
- The drawdown forces allocators to recalibrate risk budgets and demand clearer transparency on drivers, liquidity assumptions, and how quickly portfolios can de-risk during regime shifts.
- Investors will watch for tighter risk controls, consistent reporting, and a credible reset that proves institutional crypto strategies can endure volatility.
Brevan Howard’s BH Digital Asset fund logged a 29.5% decline in 2025, its steepest annual drop since the vehicle launched in 2021, according to a Financial Times report. The headline takeaway is that institutional crypto exposure can still deliver venture-style drawdowns. For allocators, a year like this forces an immediate reset of expectations, risk budgets, and manager scorecards. The number is not just a performance datapoint; it is a reminder that crypto’s beta can overwhelm strategy narratives when liquidity thins and correlations jump. It also pressures platforms to tighten controls, reporting cadence, and client communications.
What the drawdown signals for institutional crypto strategies
In governance terms, a 30% annual loss quickly becomes a stress test for mandate design, liquidity terms, and how “multi-strategy” is defined in practice. The core issue is whether the product’s risk engine is calibrated for crypto’s regime shifts. When markets gap, managers can be forced to de-risk into weakness, crystallizing losses and widening tracking error versus benchmarks. That dynamic can be amplified if the portfolio mixes liquid tokens with longer-dated venture exposures, where marks lag. The operational priority becomes transparency: what drove the drawdown, what is repeatable, and what is path-dependent for investors too.
For allocators, the “worst since launch” label matters because it triggers policy responses inside investment committees. The key takeaway is that allocation decisions will now be driven by process, not slogans about adoption. Due diligence tends to pivot toward downside controls: position sizing, counterparty limits, custody and settlement workflows, and how quickly risk can be reduced without blowing out execution. Managers that can articulate a coherent post-mortem often preserve trust even after a bad year; those that cannot may face slower subscriptions and tougher renegotiations of terms. Reputation becomes an asset class in this cycle.
The drawdown sets a higher bar for what “institutional” means in digital assets: disciplined risk, robust operations, and clear governance. The forward-looking question is whether the platform can turn a difficult year into a credible reset. Investors will watch for evidence of tighter risk limits, more consistent reporting, and a portfolio mix that can survive both volatility spikes and slow liquidity windows. If performance stabilizes, the episode may be treated as a rite of passage; if volatility persists, it could reshape capital allocation across the sector for longer than many participants expect today.
