Other industry highlights:

• Multi-Strategy Fund Applies Cross-Asset Approach to Digital Asset Markets

• $1.5B to $300M Drop Sparks Shake-Up Across DeFi Hedge Funds

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^{🗞 Allocator Developments 🗞}

$750M Crypto Fund of Funds Targets Launch Later This Year — Edge Capital Group, not to be confused with the DeFi hedge fund Edge Capital, is working exclusively on the launch of a new crypto and traditional finance-focused fund of funds later this year, with expected starting assets of approximately $750M. The vehicle is understood to target allocations across a broad set of trading strategies spanning CeFi and DeFi markets, as well as liquid cash, futures, and FX, including systematic global macro, relative value, delta-neutral and market-neutral statistical arbitrage, cross-exchange arbitrage, momentum and volatility, and market-making/HFT strategies.

Fund Launch Partners Targets Additional $15M for Emerging Manager GP Stakes — Fund Launch Partners, a GP stakes vehicle focused on seeding and partnering with emerging fund managers, is preparing to deploy an additional $15M across six to ten new managers. The firm has already backed 13 managers with average commitments exceeding $2M and is targeting established operators seeking operational support and growth capital to scale their platforms.

$1.75B Asset Manager Shutters Multi-Manager Platform — According to sources close to CFW, TwoPrime Asset Management has shuttered its external manager and multi-manager program. Crypto Funds Watch previously reported on the initiative in April 2025, when the firm oversaw approximately $1.75B in assets and was writing $1–10M tickets to BTC-denominated algorithmic strategies with at least $1M in AUM and a three-month track record. Sources indicate that TwoPrime had allocated to roughly 30–40 managers before suspending new commitments and ultimately winding down the program.

New York Multi-Manager Appoints VP of Asset Raising to Expand $200M Investment Program — Falcon Investment Management has appointed Louis Mills as Vice President, Asset Raising and Investor Relations. Mills previously advised high-net-worth and ultra-high-net-worth individuals, as well as family offices, on private market investments spanning private equity, venture capital, and private credit, managing a book of more than 100 clients. At its peak, Falcon oversaw approximately $1B in assets under management. In May 2021, the firm launched and began managing a first-loss multi-manager program, which has since attracted more than $200M in notional allocations across multiple teams.

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🔥 What’s Hot in Crypto 🔥

Multi-Strategy Fund Applies Cross-Asset Approach to Digital Asset Markets

In a difficult year for long-biased strategies, Finality Liquid Opportunities (FLO) returned +89% in 2025. The strategy prioritizes capital preservation through a cross-asset framework and disciplined risk management, reflected in limited drawdowns of -6% in Q1-25 and -1% in Q4-25, with exposure reduced in early October as forward risk conditions weakened. Since its July 2024 inception, FLO has generated an annualized Sortino ratio of 4, downside volatility of 13.2%, and a 0.65 correlation to the S&P 500 (as of December 31, 2025).

FLO is a multi-strategy hedge fund providing liquid exposure to blockchain-related equities, credit, derivatives, and digital assets. The strategy combines top-down macro analysis with bottom-up fundamental research, supported by a proprietary quantitative risk framework designed to forecast 30-day forward market conditions. Together, these frameworks guide position sizing, gross and net exposure, and overall portfolio risk calibration, while investment decisions remain discretionary. Capital rotates across directional, fundamental, and absolute-return strategies based on prevailing market regimes.

A differentiated component of the portfolio has been public corporate credit in blockchain-related companies, including senior debt, convertible bonds, preferred securities, and distressed credit. At the start of 2026, the firm launched a dedicated vehicle for allocators with credit mandates, Finality Credit Opportunities (FCO).

FLO is managed by David Grider and Kamal Mokeddem. Kamal, a co-founder of Finality Capital Partners, previously served as Head of Research at Crabel Capital Management, a $5B quantitative asset manager, and co-founded Omniex, an institutional OEMS/PMS platform later acquired by Gemini. David, Portfolio Manager of FLO & FCO, previously served as Head of Research at Fundstrat and Grayscale.

Finality Capital Partners manages over $150M in assets and provides institutional access to blockchain-related strategies across venture, hedge fund, and credit.

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$1.5B to $300M Drop Sparks Shake-Up Across DeFi Hedge Funds

Institutional DeFi markets were rattled following reports that MEV Capital—once a major allocator in the sector—suffered a sharp decline in assets after the deUSD stablecoin temporarily lost its dollar peg in late 2025. While early reporting portrayed the episode as a severe operational crisis, a shareholder has since disputed parts of that narrative, underscoring ongoing disagreement about what unfolded inside the firm.

An investigation by The Big Whale described the depeg as the breaking point for MEV Capital. The stablecoin shock triggered automated liquidations across several protocols, hitting strategies tied to Elixir’s deUSD particularly hard. According to the report, MEV Capital incurred more than $10M in direct losses, while its onchain assets fell from roughly $1.5B to around $300M within weeks—an approximately 80% decline.

The report also cited internal instability, including employee departures and uncertainty around the role of CEO Laurent Bourquin, fueling speculation about the firm’s future in institutional DeFi.

However, a 4% shareholder in MEV Capital has pushed back on several claims. The investor acknowledged the steep decline in assets but said reports suggesting that Belem Capital had “taken over” MEV were incorrect. According to the shareholder, internal conflicts did occur but were not initiated by Belem. The investor also noted that Bourquin remains reachable and emphasized that Belem remains independent of Rockaway.

What is clear is that key mandates and personnel are shifting. Parts of the MEV ecosystem—including team members affiliated with Belem—have moved toward RockawayX, a digital asset investment firm managing roughly $2B. Midas has already concluded its relationship with MEV Capital and appointed RockawayX as strategy manager for its tokenized strategies, mMEV and mevBTC, with the firm now responsible for risk monitoring and strategy oversight.

RockawayX is also expanding its footprint in institutional DeFi and has been building out its public vault activities. Separately, the firm’s venture arm—launched in 2023—still holds approximately $35M in dry powder to deploy.

Meanwhile, Belem Capital is restructuring independently. The Luxembourg-based fund recently announced it has internalized the institutional asset management team historically responsible for its portfolios, ending the management mandate previously held by MEV Capital. Leadership of the integrated team remains anchored with Belem’s founding partners, including Chief Investment Officer Nassim A., Chief Financial Officer Gytis Trilikauskis, and Chief Technology Officer Xavier G., who has joined as a General Partner.

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🍿 Blockchain Bytes 🍿

• Trend Research, a HK-based crypto investment firm affiliated with LD Capital, unwound an estimated $747M ETH position in a rapid deleveraging event after building one of the largest private ETH stakes in late 2025, reportedly peaking between 650K and 792KETH. The firm had built a roughly $2B looped long strategy during the rally, but the position was reduced to zero after buying near the top (Trading Strategy)

• Apollo Global Management signed an agreement with the Morpho Association to acquire up to 90M MORPHO tokens over four years — roughly 9% of the protocol’s total supply — positioning the $938B asset manager as a major stakeholder in the decentralized lending platform (Coindesk)

• DBA, the New York-based crypto investment firm led by Jon Charbonneau and former Galaxy Digital investor Michael Jordan, raised $62M for its second 10-year venture fund, following a $50M debut fund in 2023. The firm invests across private and public markets with a focus on early-stage lead positions and backs projects spanning base-layer infrastructure, decentralized exchanges, and tokenized capital formation platforms (The Block)

• Gemini Fund reported a 1.1% gross return in December, bringing its 2025 gross annual performance to 28.0% and marking its second consecutive year as “the top-performing market-neutral liquid yield fund globally”. Managed by LM5 Capital, the strategy posted a 2.6 Sharpe ratio amid heightened crypto volatility and has delivered a 120.4% return since its May 2023 inception (LM5 Capital)

• Rising Fund gained 4.82% in January, outperforming BTC by 14.95% during a broader market drawdown, marking a milestone in the fund’s performance following its transition to a fully quantitative framework at the start of 2026. The strategy shift — led by newly appointed CEO Ankit Verma, former CEO of Mudrex Capital — centers on capital preservation and systematic alpha generation through momentum, mean reversion, volatility capture, and options-based positioning (Rising Fund)

• A dispute arose between Haseeb Qureshi and Alexander Pack over the founding of Dragonfly Capital, with Qureshi claiming he built it from scratch while Pack argued it had been established with a $100M fund before Qureshi joined. Despite their disagreements, Dragonfly recently launched a $650M Fund IV, now managing around $4B (CryptoRank)

• Brevan Howard’s flagship BH Digital Asset Fund fell 29.5% in 2025, marking its worst annual performance since launching in 2021, as a broad crypto sell-off weighed on returns. The setback follows back-to-back gains of 43% in 2023 and 52% in 2024, and comes amid leadership changes, with Gautam Sharma departing and former Coinbase executive Chris Rayner-Cook stepping in to lead the strategy (Hedgeweek)

• Michael Bijesse, formerly a Vice President at Houlihan Capital, joined Fifth Era & Blockchain Coinvestors as Head of Capital Formation (West) and Head of Marketing (Fifth Era), while Jonathan St. Jacques moved to Grayscale Investments as Head of West Coast Institutions from BITKRAFT Ventures (Grayscale)

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