January 2026
January was a difficult month for digital assets. The Digital Fund returned -11.94% as prices fell across major coins and many altcoins followed. Bitcoin ended the month down 7.64% at US$81,205.00, while Ethereum fell 15.18% to US$2,530.61. Alpha Prime Trust returned 0.18% and finished the month in positive territory. Markets moved quickly at times, and that rewarded careful sizing and a focus on what could be traded reliably.
The US Federal Reserve held the federal funds rate target range at 3.50% to 3.75%, and markets stayed sensitive to inflation and growth updates. Crypto investment flows also changed quickly through the month. CoinShares reported weekly inflows of US$571m in the early month, followed by another strong week in which Bitcoin and Ethereum led inflows. The Block reported that around US$1.2bn flowed into US spot Bitcoin ETFs over the first two trading days of the year, before sentiment cooled later in the month. CoinShares reported US$1.73bn of outflows in the last week of January, led by Bitcoin (US$1.09bn) and Ethereum (US$630m). These swings in flows contributed to choppy pricing and sharper sell-offs when confidence weakened.
Outside crypto, demand for defensive assets remained strong in January. The World Gold Council noted that global gold ETFs added around 120 tonnes in January, taking holdings to a new record and valuing them at about US$669bn. On the policy side, Australia kept moving on market structure for digital assets. The Treasury published an exposure draft on regulating digital asset platforms on 2 February 2026, proposing changes to the Corporations Act 2001 to capture digital asset platforms and tokenised custody platforms as new financial products. Against this mix of fast-moving prices and active policy work, both funds kept risk controls tight.
Alpha Prime Trust
Alpha Prime Trust returned 0.18% in January. The market-neutral sleeve returned 0.27% and the DeFi strategy returned 0.41%, helped by income-style opportunities and selective positioning. The momentum forex strategy added 0.84% and provided useful diversification during a month when crypto prices were weak. Arbitrage was the main drag at -3.09%. Funding conditions were not consistent across the month, and derivatives market commentary tracked by The Block noted that funding rates stayed subdued. The Trust kept exposures close to neutral and avoided pushing leverage when conditions were unstable.
Arbitrage had a harder month because price gaps moved quickly and trading costs rose on fast days. When markets moved in one direction, it was harder to put on hedges at clean levels and harder to exit without paying up. The late-month outflows reported by CoinShares also point to weaker risk appetite, which can reduce liquidity and make these trades less forgiving. By contrast, the market-neutral and DeFi sleeves benefited from positions that could be kept tight and adjusted quickly. The mix of outcomes shows why the Trust spreads risk across multiple sleeves rather than relying on one style of return.
Digital Fund
The Digital Fund returned -11.94% in January as the wider crypto market fell. Bitcoin declined 7.64% to US$81,205.00 and Ethereum declined 15.18% to US$2,530.61, with Ethereum falling more than Bitcoin. During risk-off periods, many coins tend to move together, and that reduced the benefit of diversification over short timeframes. The portfolio remained diversified, but the broad decline across the complex weighed on returns. Trading and rebalancing were handled carefully when markets were moving quickly.
Performance was driven by a few large moves across holdings. Hyperliquid rose 10.84% to US$28.73 and Monero rose 8.96% to US$477.37, showing relative strength during a weak market. These gains helped offset some of the broader declines, and they reflect how demand can concentrate in a small set of names even in down months. On the detractor side, Uniswap fell 31.62% to US$4.00 and Litecoin fell 22.30% to US$60.23, which is consistent with larger drawdowns in liquid altcoins when investors cut risk.