The New Era of Digital Assets: How the U.S. Election Sets the Stage for Growth
Hyla Fund Management
California-based manager of award-winning digital assets and blockchain funds of funds since 2017.
Special Announcement:
Hyla Fund Management at DevCon Bangkok
We will be attending DevCon in Bangkok from November 12 to 15. Please let us know if you plan to be there and would like to meet with us!
Paola Origel Nominated as One of the Top 50 Women in Investment Management (2024)
This week, our CEO and Co-Founder, Paola Origel, was recognized as one of the top 50 women in investment management for 2024. This prestigious award reflects the transformative work our team is doing at Hyla Fund Management, advancing the future of investment management in digital assets while supporting our investors and community. You can read the full announcement using this link.
Market Analysis:
This week Bitcoin achieved a new all-time high, trading as high as $77,200, following a strong rally sparked by the results of the U.S. presidential election. Price action has been notable, breaking a seven-month record, and continuing bullish momentum. The Federal Reserve cut rates by 0.25% which added further support to crypto’s upward trajectory. Since October’s double bottom formation around $60k, Bitcoin has remained bullish, with many predicting continued growth, potentially surpassing $100,000 before the presidential inauguration. Options & OI support a rally to at least $80k in the near term.?
Ethereum has outperformed expectations, surging 18% in the last week to reach nearly $3,000. This represents an important breakout from the $2,300–$2,750 range it has been trading in for several months. Ethereum's strong performance is fueled by growing optimism in the decentralized finance (DeFi) sector, which has seen a 28% rise over the last week. Ethereum remains the primary ecosystem for DeFi activity and should play a critical role as the space evolves.
More broadly, the cryptocurrency market is seeing substantial institutional interest. Bitcoin open interest has hit a record high of $45.41 billion, with CME's Bitcoin futures trading volume reaching $13.15 billion—an all-time high. On the ETF front, Bitcoin and Ethereum spot ETFs are seeing massive inflows, with Bitcoin spot ETFs attracting over $ 2 billion in net inflows since the US election. BlackRock’s Bitcoin ETF saw a record $4.1 billion in trading volume on election day, reflecting growing institutional participation in the asset class.
Trump’s presidential victory has generated optimism in the crypto space, particularly with his pro-crypto stance. His campaign promises include making the U.S. the global hub for cryptocurrency, establishing a strategic Bitcoin reserve, removing Gary Gensler from the SEC and reducing regulatory hostility toward the industry. With a favorable Congress and Senate—both leaning pro-crypto—the potential for favorable cryptocurrency legislation has never been higher. We’d specifically highlight the defeat of crypto-antagonist OH Senator Sherrod Brown, who lost his race to crypto-supporter Bernie Moreno. The removal of Senator Brown results in a new chair for the Senate Banking Committee, likely crypto-friendly Senator Tim Scott, a critical committee for passing crypto legislation. Further, the passage of the Bitcoin Act, which would treat Bitcoin as a reserve asset, could be a game-changing endorsement for the industry.?
As the market continues to evolve, institutional and retail investors must navigate the changing landscape, from new technological developments to regulatory shifts and growing global adoption. The future of cryptocurrency looks increasingly promising, with strong support from both market fundamentals and government policies.
Market Overview at the time of publication (according to coincodex):?
Hello friends,
The recent U.S. election has set the stage for a transformative period in the cryptocurrency industry—one rich with opportunities for growth, innovation, and economic freedom. At Hyla Fund Management, we believe now is the right time for investors to explore investing in digital assets, and we believe our Multimanager/Multistrategy approach is well-suited to navigate this evolving landscape. The message from voters is clear: crypto-friendly policies are in demand, and Washington is listening.
Here's a look at why we’re so optimistic about the future of crypto.
A Pro-Crypto Administration
In a historic shift, the new U.S. administration has expressed resounding support for digital assets, with policy promises that could accelerate crypto’s integration into the mainstream financial system. These proposals include creating a national Bitcoin reserve and appointing a dedicated crypto advisory council.? The entire Trump leadership team appears to be fans of crypto- President-elect Trump is fond of selling eponymous NFTs, his family even launched their own DeFi protocol; Vice President-elect JD Vance is a noted Bitcoin advocate and owner; and the Chair of Trump’s Transition Team, Howard Lutnick, CEO of Cantor Fitzgerald, runs a multi-billion dollar custody business for the USDT “Tether” stablecoin.? Needless to say, we expect to see a far more open, transparent, and supportive regulatory environment for the industry as soon as the new Administration takes office— one that embraces blockchain as a core component of U.S. tech and financial infrastructure.
Crypto's Victory in Congress
The election results have also delivered a pro-crypto Congress, with 257 pro-crypto lawmakers now holding seats in the House. This powerful coalition of legislators signals a significant shift in sentiment, with key anti-crypto figures, such as Senator Elizabeth Warren and SEC Chairman Gary Gensler, losing influence. Their loss of status marks a rejection of perceived heavy-handed regulation. Furthermore, crypto was the second largest political donor of any industry in the 2024 election cycle, and its leading political action committee, Fair Shake, amassed a stellar track record of success, with their donation recipients winning 47 out of 56 races as of this writing.? Remarkably, Fair Shake has already lined up an additional $76 million to spend on the midterm elections in 2026.? Suffice it to say, the new Congress will be the most pro-crypto Congress ever, and we expect both parties to now give full-throated support to the rhetoric of economic freedom and innovation, and to work in a bi-partisan manner to finally pass a comprehensive legislative framework for digital assets.
Regulatory Optimism: A New Chapter for Crypto
A long-standing challenge for crypto has been regulatory ambiguity, particularly with the SEC’s often restrictive approach. The incoming administration’s pro-crypto stance signals an era of regulatory reform, including the strong likelihood of appointing new, crypto-friendly leaders within regulatory agencies (e.g. Hester Pierce as a candidate for SEC Chair). This shift would bring much-needed clarity to investors, opening doors for structured, transparent oversight that supports innovation while also protecting market participants.
Revenue Realities: Tangible Value from Digital Assets
Crypto projects are maturing financially. Platforms once considered speculative are now seeing steady revenue growth, with profits being returned to token holders, enhancing their intrinsic value. With regulatory clarity on the horizon, we anticipate further financialization of crypto tokens, which will strengthen the connection between platform performance and token value—an exciting prospect for investors seeking long-term growth potential in this dynamic sector.
For institutional investors, the stability of Tether’s USDT has been a critical concern, with Circle’s smaller USDC stablecoin generally preferred. However, recent advancements in transparency, including independent audits of Tether’s reserves and custodial backing from Trump Transition Team Chair Howard Lutnick’s Cantor Fitzgerald, have solidified its reliability. With these improvements, USDT has strengthened its position as the primary stablecoin in crypto markets globally, providing essential liquidity and stability for institutional trading.
Investor Sentiment and Market Movement
As we mentioned in our market analysis section, the impact of this political shift is already resonating across markets. Bitcoin recently hit a new all-time high of $77,200, fueled by a post-election rally and a surge in high-net-worth (HNW) transactions. Some analysts forecast Bitcoin reaching $100,000 by year-end, as a potential U.S. government purchase and stockpile of Bitcoin’s supply could remove $8-10 billion from the market, further constricting supply. This trend has spilled over to other assets as well, with Ethereum and DeFi tokens experiencing strong growth driven by new partnerships and institutional adoption.
Major financial institutions are making bold entries into blockchain and digital assets, signaling a new era of mainstream adoption. BlackRock, the world’s largest asset manager, saw its spot Bitcoin ETF (IBIT) hit $1.1 billion in inflows on November 7, setting a record trading day as Bitcoin continues to reach new all-time highs. Meanwhile, Michael Saylor, executive chairman of Microstrategy, continues his steadfast investments in Bitcoin, now holding a portfolio of 250,000 BTC, worth over $19 Billion. Other major players are also accelerating their blockchain initiatives: JP Morgan has expanded its blockchain focus, and Stripe recently invested $1 billion into stablecoin infrastructure with its acquisition of Bridge. SWIFT, the global interbank messaging system, a key banking infrastructure system since 1973, announced a pilot program with crypto oracle network Chainlink, to tokenize and automate the $60 trillion mutual fund market. These moves reflect a growing acceptance of digital assets across traditional finance, paving the way for continued growth and integration of blockchain technology.
Hyla Liquid Venture Fund: The Power of a Multimanager/Multistrategy Approach to Investing in Digital Assets
Digital assets continue to mature, and the need for a diversified investment strategy has never been greater, as the breadth of opportunities is rapidly expanding.? We expect this expansion to accelerate markedly thanks to the shifting political winds in Washington DC, because the long-tail of digital asset tokens beyond Bitcoin and Ethereum has long operated in a regulatory purgatory in the US.? From Decentralized AI to Bitcoin DeFi to Decentralized Physical Infrastructure, with a likely newly friendly regulatory landscape in the offing for most responsibly managed digital assets, we expect the breadth and depth of token markets to expand rapidly.
However, it is difficult for any single investment manager to stay on top of all sub-sectors and assets in such a rapidly shifting and expanding market. Our multi-manager/ multi-strategy model addresses this challenge by investing across a range of specialized managers and strategies. This approach allows investors to benefit from the breadth of digital asset ecosystem growth while mitigating risk through diversification.
We invite you to learn more about our funds by visiting our website at www.hylafunds.com or by emailing us at [email protected]. We would be happy to discuss how our investment strategies can align with your portfolio.
The Future is Bright for Crypto
The new political landscape, growing institutional interest, and expanding blockchain adoption indicate a promising future for digital assets. A financial revolution is underway, challenging traditional systems and offering unprecedented efficiency and economic freedom opportunities.
At Hyla Fund Management, we’re committed to capturing these opportunities for our investors. Our funds are designed to balance risk and reward in this rapidly advancing industry. Join us as we navigate this new frontier and leverage innovative strategies to optimize success.
Stay tuned for more updates from the Hyla Fund team. We thank you for being a part of this journey!
The views expressed in this newsletter are solely those of the authors and should not be considered as investment advice or recommendations. They are not intended to influence any investment decisions.