The Current Financial System Cracks

Mike Klein
April 14, 2025

April 2025 Crypto Portfolio Update – Navigating Market Fluctuations with Long-Term Vision

In Brief
The cryptocurrency market is volatile, but not all volatility is created equal.

This time the dip is macro-led—a byproduct of global trade conflicts and recession fears, not internal crypto instability. As the VIX hit its highest level since 2020 and bond market volatility surged, crypto's relative resilience has turned heads.

In fact, Bitcoin's 30-day volatility recently fell below FAANG stocks (source), a rare signal historically followed by outperformance.

We believe this is a setup, not a setback. Our strategy continues to focus on high-conviction themes including:

AI and decentralized compute networks
Real-world asset tokenization (RWA)
Decentralized derivatives
Next-gen liquidity hubs

In short:

People are nervous about the current financial system.

When people become nervous, they explore alternatives. Crypto is the only alternative financial system

Macro Backdrop: When Volatility Creates Opportunity Despite the recent volatility in global markets, we believe the current macro conditions are laying the foundation for crypto's next leg up. Rather than viewing these developments as threats, we see them as indicators of deeper systemic shifts that ultimately favor decentralized assets.

Tariff Shock & Risk-Off Panic: President Trump’s sweeping global tariffs rattled markets. Over $5 trillion in equity value was wiped in the selloff, while Bitcoin's pullback (~15% YTD from a ~$90K peak) was relatively mild (source).
Fed Pivot Imminent: Federal Reserve officials, including Governor Waller, now support rate cuts if tariffs stick. Traders are pricing in 125bps in cuts for 2025, with a ~40% chance of an emergency cut. Liquidity cycles like this have historically fueled crypto upswings (source).
Bitcoin's Calm in the Chaos: BTC’s volatility dropped below the Nasdaq-100. Historically, these periods have preceded strong relative outperformance (chart).

Institutional Footprint Expanding Quietly While retail sentiment fluctuates with headlines, institutional conviction is steadily climbing. Major asset managers and global finance platforms continue to deepen their exposure and infrastructure around crypto—a powerful signal for long-term adoption.

BlackRock ETF Inflows: IBIT has posted net inflows every trading day in Q1. One-day inflow on April 4 hit $65.3M (chart).
HUGE ….Nation-State Adoption: Russia has reportedly settled oil contracts in BTC/ETH/USDT to bypass sanctions—a sign crypto is being tested as a state-level settlement rail (Reuters).
Fintech Integrations: Mastercard added Ondo's tokenized Treasuries. Fidelity filed to launch tokenized money markets. Chainlink, SWIFT, and others are building financial bridges.

This is not speculation. It's strategy.

Strategy Update: Rotating Toward Leadership

This isn’t our first crypto drawdown. And if history is a guide, drawdowns during bull markets help clarify market leaders.

We’re actively rotating out of projects that are under-delivering, reallocating into those outperforming in key KPIs. This isn't just tax-efficient; it's conviction-driven.

Updated Leaderboard: Growth Metrics vs. Drawdowns

Asset	ATH Price	Current Price	Drawdown	Growth Metric Since ATH
Ethereum (ETH)	$4,891.70	$1,530.00	68.7%	Post-Merge, deflationary supply, upcoming Dencun upgrade.
Solana (SOL)	$294.85	$101.00	64.0%	Significant increase in TPS, growing developer community.
Bittensor (TAO)	$767.68	$190.00	74.7%	Massive growth in active GPUs, advancements in subnet technology.
Render (RNDR)	$13.60	$2.80	78.8%	Migration to Solana for improved performance, integration with Apple.
Ondo Finance (ONDO)	$2.14	$0.74	64.7%	Exponential growth in TVL, strategic partnerships like Mastercard.
Curve DAO (CRV)	$60.50	$0.46	97.1%	Record trading volume, key role in DeFi liquidity.
Aerodrome (AERO)	$2.38	$0.32	86.4%	Leading DEX on the growing Base network.
io.net (IO)	$6.43	$0.56	91.3%	Rapid revenue growth in decentralized AI compute.
Akash Network (AKT)	$8.08	$1.25	84.5%	Strong revenue growth in decentralized cloud computing.
GMX (GMX)	$91.07	$11.00	87.9%	Consistent fee generation as a leading decentralized exchange.
Chainlink (LINK)	$52.88	$11.24	78.7%	Key role in RWA tokenization, CCIP for cross-chain interoperability.
NEAR Protocol (NEAR)	$20.42	$2.50	87.7%	Scalable platform, focus on AI and Chain Abstraction.
Virtuals Protocol	$5.07	$0.45	91.1%	Leading AI Agent issuance platform on Base, potential for metaverse growth.
PAAL AI (PAAL)	$0.86	$0.094	89.1%	Growing adoption in AI chatbot space, profit sharing model.

View real-time TVL charts and token flows on DeFi Llama

Education Spotlight: What Are TAO Subnets?

Bittensor (TAO) has rapidly become one of the most exciting decentralized AI platforms—and subnets are the engine behind it.

What is a TAO Subnet?
A subnet is a specialized sub-network within the broader Bittensor protocol that trains or serves models for a specific AI task. Think of it like a decentralized "team" of models all focused on doing one thing extremely well—language modeling, image recognition, data labeling, etc.

Why Subnets Matter:

Specialization: Each subnet focuses on a single AI domain, allowing for deep optimization.
Incentivization: Contributors (miners) are rewarded in TAO tokens based on how useful their AI outputs are to the network.
Autonomy: Subnets can set their own rules, governance models, and even create their own tokens or extensions.

How They Power Growth: As more subnets emerge, TAO becomes more than just a model marketplace—it evolves into a decentralized AI operating system. Each new subnet adds both utility and data to the protocol, and TAO captures the value created across this AI ecosystem.

Examples:

Language Subnet: Competes with ChatGPT-style models.
Vision Subnet: Offers tools for recognizing images or video content.
Routing Subnet: Helps other AI agents find the best models across the network.

How to Participate in TAO Subnets: If you're in the fund, you're already exposed to TAO and actively participating in the subnet economy. No further action is required—we manage delegation and exposure on your behalf.

However, for those interested in participating directly:

Buy TAO on an Exchange: Most users begin on centralized exchanges such as KuCoin, MEXC, or Gate.io. TAO is not listed on Coinbase or Binance as of now.
Transfer TAO to a Wallet: Set up a TAO-compatible wallet using tools like Finney Wallet or Coldkey. Ensure you control the private keys.
Delegate or Run a Miner Node: You can stake TAO to support subnet validators, or run your own miner to provide AI services. Running a miner requires GPU resources and technical setup.
Explore Subnets: Visit taostats.io to view active subnets, validator scores, and miner performance.
Bridge Tools: If needed, use the Bittensor bridge UI to move assets into the native network. TAO uses its own blockchain, so make sure you're interacting with official infrastructure.

We believe subnets are one of the clearest unlocks for scalable, decentralized machine intelligence—and TAO's architecture puts it in the lead.

Closing Thought: Opportunity in Dislocation

We don’t fear volatility—we allocate through it. Our strategy balances:

Thematic growth (AI, RWAs, Derivatives)
Yield stability (tokenized T-bills, lending)
Risk tools (on-chain options, perps)

For every macro dislocation, someone is preparing to build generational wealth. We choose to think like institutions—and act with conviction.An ask

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