The 2025 crypto market concludes with turbulence; why are quantitative funds instead performing steadily and outperforming?

The 2025 crypto market concluded with volatility, with Bitcoin and Ethereum failing to hold their key levels from the beginning of the year. In December, the market continued its weakness under the dual pressures of ETF fund outflows and holiday liquidity shortages, with BTC down 3.06%, ETH down 0.67%, and Bitcoin spot ETF experiencing another outflow of $733 million. However, in such a market environment, some quantitative strategies demonstrated opposite resilience. According to the latest private wealth management monthly report released by Gate, its quantitative products achieved remarkable performance.

How Quantitative Strategies Maintain Steady Defense in Volatility

Core products perform outstandingly

In a complex market environment, Gate Private Wealth’s quantitative fund strategies have shown robust risk control capabilities. In 2025, several of its core quantitative products achieved a 100% win rate, with the most notable being the Star Core Intelligent Investment (USDT) product.

This product leads the portfolio with an 11.0% annualized return and a Sharpe ratio of 4.3. The Sharpe ratio is a key indicator measuring risk-adjusted returns; the higher the value, the more excess return is gained for the same level of risk. A Sharpe ratio of 4.3 indicates that this product has achieved relatively outstanding returns while controlling risk.

Defensive Logic of USDT Strategy

The specific performance of the USDT strategy better illustrates the point. The strategy achieved a 1.6% return in December alone, with a 7.5% cumulative return for the year, and almost no overall drawdown. This means that even during the most challenging market periods, this strategy maintained stable positive returns with virtually no significant losses.

Comparing market performance reveals the difference:

Behind this performance lies the systematic advantage of quantitative strategies in market pricing and risk management.

Why Market Environment Has Spawned Such Demand

Market Characteristics of 2025

From a macro perspective, the volatility in the crypto market in 2025 is not an isolated event. According to relevant market data, overall market sentiment remains cautious, ETF fund outflows continue, and the Fear & Greed Index stays low. This indicates that traditional “buy and hold” strategies face challenges in this cycle.

In such an environment, quantitative strategies that can maintain stable returns during market downturns are especially valuable. They are not pursuing maximum gains but aim for steady positive returns under controlled risk.

New Trends in Institutional Allocation

According to Gate’s outlook, future focus will be on increasing institutional participation. As global crypto regulation coordination and legislative processes advance, digital assets are gradually integrating into mainstream financial systems. In this process, quantitative and risk control capabilities will become core competitive advantages in private wealth management.

This means that not only retail investors but also institutional investors are reassessing their allocation strategies, shifting from purely seeking returns to pursuing risk-adjusted gains.

Future Allocation Logic

In the short term, economic fundamentals remain resilient, but market expectations for rate cuts in January are low, and policy divergence may further increase market volatility. In this uncertain environment, risk control ability becomes a scarce resource.

In the medium to long term, the development of institutional on-chain infrastructure, optimization of Ethereum staking ecosystems, and traditional financial institutions’ promotion of on-chain deposit and settlement solutions are laying the foundation for institutionalized digital asset allocation. Under this trend, quantitative strategies capable of effectively controlling drawdowns and generating stable returns will attract more capital.

Summary

The volatility in the 2025 crypto market is a reality, but it also exposes a core demand among market participants: to achieve stability amid uncertainty. The performance of Gate’s private wealth quantitative funds demonstrates that this demand can be met. An 11.0% annualized return, a 4.3 Sharpe ratio, and near-zero full-year drawdown are not boastful claims of excess returns but showcase a different allocation logic—achieving steady profits under controlled risk.

With increasing institutional participation and improved market environment, risk-first strategic allocation may become the standard rather than an option in private wealth management.