The cryptocurrency markets faced significant turbulence during the final months of 2025, offering investors an important lesson in how different investment approaches respond to volatility. Bitcoin experienced substantial price swings during October and November, declining from highs above $126,000 to seven-month lows near $80,000 before recovering somewhat to close November around $91,000.¹
For investors considering cryptocurrency exposure, this period highlighted important differences between hedged and unhedged investment strategies during periods of market stress.
Bitcoin's trajectory during October and November 2025 reflected a combination of market forces that created sustained selling pressure across cryptocurrency markets.
The cryptocurrency declined approximately 20% cumulatively over the two-month period from September 30 through November 30, 2025.¹ What made this selloff particularly challenging was the intramonth volatility, as Bitcoin experienced a peak-to-trough decline exceeding 27% during the month of November, before partially recovering by the end of the month²
The Fortuna Hedged Bitcoin ETF (HBTC) employs an options-based hedging strategy designed to provide Bitcoin exposure while attempting to mitigate downside risk during volatile periods. This approach differs from unhedged Bitcoin investment products that seek to track Bitcoin's price movements more directly.
During the fourth quarter of 2025, this strategic difference produced notably different outcomes.
October 2025: Bitcoin declined 4.6% for the month while HBTC posted a return of +0.62% over the same period.³ This represented an outperformance of approximately 5.2% when compared to the spot price of Bitcoin.
November 2025: Bitcoin declined -16.68% over the month while HBTC's return for November was -10.38%.⁴ This represented the fund limiting losses to approximately 62% of Bitcoin's decline, with the options strategy appearing to offset roughly 38% of the downside.
Cumulative October-November 2025: Bitcoin's cumulative decline totaled approximately 20.46% over the two-month period of October and November, 2025. HBTC's cumulative return over the same period was -9.8%.⁵
HBTC's investment approach combines Bitcoin-related exposure through futures contracts with downside protection options intended to provide a hedge against sharp declines. During periods of market decline, these hedging positions are designed to gain value, potentially offsetting some of the losses from the Bitcoin exposure.
The strategy also employs call spreads, selling upside call options to help fund the cost of the downside hedges. This structure aims to reduce the ongoing cost of hedging while retaining participation in Bitcoin price increases.
During the Q4 2025 volatility, the downside protection strategy activated as Bitcoin declined, moving into profitable territory and providing the intended cushion against losses. (This is particularly notable given the severity of the intramonth declines, which exceeded the end-of-month figures due to partial recoveries before month-end.)
This same period of 2025 serves as a case study in how different investment structures respond to cryptocurrency volatility. While Bitcoin's substantial gains in earlier months attracted significant investor interest, the rapid reversals in October and November demonstrated that volatile assets can move sharply in both directions.
For investors considering cryptocurrency exposure, this volatile experience highlights several important considerations.
It's important to understand the trade-offs inherent in any investment strategy. While HBTC's hedging approach demonstrated downside mitigation during last year’s October and November sell-offs, many options-based strategies capture less of the upside during strong rallies than unhedged approaches.
HBTC uses The fund's structure aims to provide what the portfolio management team calls "asymmetric returns" – participating meaningfully in Bitcoin gains while limiting participation in severe losses.
Finally, actively managed strategies like HBTC have operating expenses that may be higher than passive index products. Investors should consider these costs alongside the potential benefits of active risk management.
For a detailed examination of HBTC's performance reactive to Bitcoin over the periods discussed above, including specific data on options positioning, risk-adjusted return metrics, and month-by-month analysis, download our complete whitepaper: "The Fortuna Hedged Bitcoin ETF (HBTC) Delivered Resilient Bitcoin Exposure Amid Late-2025 Volatility"
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HBTC does not invest directly in Bitcoin