In May, BTC declined approximately 2.9% and ETH fell more than 11%, pressured by escalating geopolitical risks and a broader deterioration in market risk appetite. Despite the weak crypto market performance, quantitative funds posted a strong recovery, with 90% of strategies delivering positive returns. Among them, Interstellar Hedging (USDT) stood out with a cumulative return of 18.6%, achieving positive performance across all 23 observed periods and maintaining a 100% win rate. Meanwhile, the maximum drawdowns of both USDT and BTC strategies remained significantly lower than BTC's price drawdown. Looking ahead, AI investment continues to emerge as a key driver of economic growth, while inflation remains the primary risk. The Federal Reserve is widely expected to keep interest rates unchanged at the June FOMC meeting.

Key Takeaways

Market Review: U.S. equities extended their gains in May, supported by stronger-than-expected earnings across the AI value chain and growing expectations for potential rate cuts in the second half of the year. In contrast, the crypto market significantly underperformed traditional risk assets. Amid rising geopolitical tensions and weakening risk sentiment, BTC fell to a local low, while ETH retraced all gains accumulated since April 2025. BTC declined approximately 2.9% during the month, while ETH dropped more than 11%.

Gate PWM Product Performance: Quantitative fund NAVs rebounded broadly in May, with 90% of strategies generating positive returns. The USDT strategy category delivered an average annualized return of 5.2%. Among all products, Interstellar Hedging (USDT) was the top performer, achieving a cumulative return of 18.6% and posting positive returns in all 23 measured periods, resulting in a 100% win rate. From a risk management perspective, the maximum drawdowns of both the USDT and BTC strategies remained significantly below BTC's price drawdown during the same period.

Outlook: Underlying economic momentum remains resilient, with business investment growing at an annualized rate of 6.4% in the first quarter. AI-related investment is increasingly becoming a major engine of economic growth. Inflation remains the key macro risk, and the Federal Reserve is expected to leave the federal funds rate unchanged at the June FOMC meeting. Meanwhile, as implementation guidelines for the GENIUS Act continue to be released, the stablecoin regulatory framework is rapidly transitioning from the legislative phase toward practical execution.

(Click below to access the full report)

Gate Research is a comprehensive blockchain and crypto research platform that provides readers with in-depth content, including technical analysis, hot insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.
Disclaimer Investing in the cryptocurrency market involves high risk. Users are advised to conduct independent research and fully understand the nature of the assets and products before making any investment decisions. Gate is not responsible for any losses or damages arising from such investment decisions.

Author: Akane, Kieran, Puffy

Disclaimer

* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.

* This article may not be reproduced, transmitted or copied without referencing Gate. Contravention is an infringement of Copyright Act and may be subject to legal action.

Download the Full Report (PDF)

Content