28 February 2026
February was a volatile month for digital assets. Bitcoin fell 20.17% to US$64,827.00 and Ethereum fell 25.00% to US$1,897.91, which set the tone for long-only portfolios. The Digital Fund returned -24.52%, as the sell-off in major coins pulled most of the market lower. Alpha Prime Trust returned 0.01%, with gains in Momentum Forex and DeFi enough to offset small losses in Volatility Arbitrage. These results were also a reflection of uncertainty with USA attacking Iran on the last day of the month, resulting in a significant end of month dip that aligned with the end of month results.
Conditions were unsettled across risk assets, with markets reacting to rates, inflation, liquidity and of course war. In Australia, the RBA lifted the cash rate target by 25 basis points to 3.85% on 3 February, reinforcing a tighter domestic policy setting. CoinShares reported large weekly outflows from digital asset investment products at the start of the month (US$1.7bn for the week published 2 February) and further outflows later in February, which kept sentiment weak. Reuters also reported that bitcoin liquidations totalled about US$2.56bn, as prices fell and weekend liquidity was thin. On the policy side, Australian Treasury published an exposure draft for regulating digital asset platforms, with submissions published on 2 February, adding to the focus on how platforms are regulated. In this environment, both funds stayed disciplined on sizing and liquidity.
Digital Fund
Digital Fund returned -24.52% in February as the market moved down sharply. Bitcoin fell 20.17% to US$64,827.00 and Ethereum fell 25.00% to US$1,897.91, with Ethereum again falling more than Bitcoin. Flows were a clear headwind: CoinShares reported heavy outflows in early February and continued outflows through the month, which reduced risk appetite. Volatility stayed high, and Reuters reported around US$2.56bn of bitcoin liquidations in recent days early in the month. These conditions tend to pressure long-only portfolios, particularly when rallies fail quickly.
Within the portfolio, Maker (SKY) was a bright spot, rising 8.74%, supported by Sky Protocol’s reported January buybacks (130m SKY repurchased using 8.5m USDS). Hedera rose 6.99%, and the month included a notable corporate signal with FedEx announcing it joined the Hedera Council on 13 February. On the detractor side, Monero fell 30.47% to US$331.91 as privacy coins remained under pressure following tighter rules and reduced exchange access reported earlier in the year. Sui fell 26.75% to US$0.857061, with late-February reporting highlighting sizeable scheduled token unlocks led by SUI (about US$48.87m), which can add supply during weak markets. The month again highlighted the value of keeping positions sized to what can be traded in stressed conditions.
Alpha Prime Trust
Alpha Prime Trust returned 0.01% in February. The Trust’s return was shaped by mixed conditions in derivatives, where funding income was less reliable and positioning reduced as the market fell. CoinShares noted continued outflows from spot Bitcoin and Ethereum ETFs over several weeks and described a broad reduction in futures positioning into late February. During the month, large bitcoin liquidations occurred during sharp moves, which is the type of price action that can raise costs and widen gaps across venues. In response, APT kept exposures close to neutral and focused on protecting liquidity. This approach helped limit the drawdown, but it also meant returns were modest when markets moved quickly.
Momentum Forex was the main positive contributor at 0.98% and DeFi added 0.46%. These sleeves benefited from clearer trend signals in FX and from income-style opportunities in DeFi that can remain available even when token prices are weak. Market Neutral has managed to contribute with 0.22% returns as cross-market moves made it harder to capture small relative opportunities without taking extra risk. Volatility Arbitrage returned -0.20% as fast reversals and higher execution costs reduced the value of option positions. The Trust continues to spread risk across multiple sleeves so it is not reliant on a single return source.