--- title: Win by Losing Less? Why HBTC Was Built for Bitcoin’s Volatile Moments description: Win by Losing Less? Why HBTC Was Built for Bitcoin’s Volatile Moments image: https://www.fortunafunds.com/hubfs/Blog%20Images/Lady%20Fortuna.png --- [Skip to content](https://www.fortunafunds.com/fortuna-funds-blog/win-by-losing-less-why-hbtc-was-built-for-bitcoins-volatile-moments#main-content) [![Fortuna Funds](https://www.fortunafunds.com/hubfs/Logo_White_Version.svg)Homepage](https://www.fortunafunds.com) - [HBTC ETF](https://hbtc.fortunafunds.com/hbtc-fund/) - [Fund Documents](https://www.fortunafunds.com/resources) - [Meet the Team](https://www.fortunafunds.com/about-us) - [Insights](https://www.fortunafunds.com/insights) - [Privacy Policy](https://www.fortunafunds.com/privacypolicy) [INVEST](https://www.fortunafunds.com/#invest) - [HBTC ETF](https://hbtc.fortunafunds.com/hbtc-fund/) - [Fund Documents](https://www.fortunafunds.com/resources) - [Meet the Team](https://www.fortunafunds.com/about-us) - [Insights](https://www.fortunafunds.com/insights) - [Privacy Policy](https://www.fortunafunds.com/privacypolicy) [INVEST](https://www.fortunafunds.com/#invest) ![](https://www.fortunafunds.com/hs-fs/hubfs/Blog%20Images/Lady%20Fortuna.png?width=1200&height=628&name=Lady%20Fortuna.png) # Win by Losing Less? Why HBTC Was Built for Bitcoin’s Volatile Moments ![Mark Adams, CIO & Co-Founder, Fortuna Funds](https://7528315.fs1.hubspotusercontent-na1.net/hub/7528315/hubfs/raw_assets/public/mV0_d-cms-elevate-theme_hubspot/elevate/images/avatar-placeholder.jpg?width=48&height=48&name=avatar-placeholder.jpg) Mark Adams, CIO & Co-Founder, Fortuna Funds July 16, 2026 *Bitcoin has fallen roughly 50% off its October 2025 all-time high. For unhedged holders, that math is brutal, and astute investors understand that a 50% loss requires a 100% gain just to return to breakeven. We built the Fortuna Hedged Bitcoin ETF ($HBTC) precisely for environments like this. HBTC seeks to substantially participate in Bitcoin's upside while aiming to limit the drawdowns that have historically destroyed investor wealth in this asset class.* ![](https://play.vidyard.com/DhMD1PVy4LR9HkXr2eWVbY.jpg) ## **What Is the 50% Loss Trap?** The deeper the loss, the more asymmetric the recovery math becomes. When an asset loses half of its value, as Bitcoin has done since October 2025, the remaining capital needs to double simply to return to the asset’s original level. Stated another way, a $100,000 position that falls to $50,000 needs a 100% return (not 50%) just to break even. Bitcoin investors have repeatedly confronted this reality. Since 2014, Bitcoin has experienced four drawdowns exceeding 50%, with the three largest averaging approximately 80% declines. In three of those four corrections, price took nearly three years to recover to prior highs.\[2\] The 2022 cycle saw Bitcoin fall from ~$69,000 to ~$16,000, which represents a decline of over 77%.\[4\] ![](https://www.fortunafunds.com/hs-fs/hubfs/undefined-1.png?width=605&height=218&name=undefined-1.png) Source: Bloomberg as of June 30, 2026 We believe the current cycle follows the same pattern: Bitcoin reached an all-time high of approximately around $126,000 in October 2025, then declined to nearly $60,000 by February 2026. Again, the asset experienced a correction of around 50%. As we’re writing this commentary (mid-June 2026), Bitcoin is again trading near $64,000, with the Fear & Greed Index\[10\] reading "Extreme Fear" - levels last seen during the collapse of the Terra Luna stablecoin in May of 2022.\[1\]\[5\] *Bitcoin has experienced four drawdowns exceeding 50% since 2014.* *The drawdown we’re currently experiencing brings Bitcoin to approximately 50% below its previous peak (October 2025). Three of the four largest Bitcoin corrections required nearly three years for full price recovery, rewarding investors that could remain patient.*\[2\] ## **What Is Driving the Current Bitcoin Drawdown?** **Why is Bitcoin declining in 2025–2026?** In our opinion, the present Bitcoin sell-off cannot be attributed to a single catalyst. Rather, it seems to be the convergence of multiple external forces, including: **Monetary policy headwinds.** Expectations for slower Federal Reserve rate cuts pushed real yields higher throughout late 2025 and into 2026. Bitcoin has historically shown sensitivity to USD real rates similar to gold and emerging-market currencies.\[6\] **ETF outflows.** At their high-water mark, U.S. spot Bitcoin ETFs were holding approximately $169.5B in Bitcoin assets. By January 2026, that amount had declined to roughly $117.5B, a combination of net redemptions and price depreciation.\[7\] When Bitcoin breached $62,000 in early June 0f 2026, another $1.5B in leveraged long liquidations was triggered.\[8\] **Leverage dynamics.** Bitcoin's market structure includes a large perpetual derivatives market running on leverage and automated liquidations. Price declines can accelerate beyond what fundamentals justify, creating a feedback loop that punishes unhedged holders most severely.\[9\] ## **How Does HBTC Look to Manage This Volatility?** HBTC is an actively managed ETF that gains Bitcoin-linked exposure through options on iShares Bitcoin Trust ETF, IBIT, a highly liquid Bitcoin-related ETF whose price movements closely track Bitcoin's spot price. (It does not hold Bitcoin directly.) On a monthly basis, the fund applies an options overlay around its long exposure to seek downside management - but without forfeiting meaningful upside participation. - Protective puts are purchased approximately 9-10% below the market to seek a floor against severe losses. - Call spreads are sold above the market to help offset the cost of those puts, generating premium income as part of the strategy's cost management. - Monthly repositioning keeps options strikes aligned with current market conditions, which portfolio managers believe to be a critical feature during extended drawdowns and recoveries. ## **HBTC Performance Under Stress** HBTC launched on March 18, 2025 and its strategy was put to the test almost immediately, when - in early April - Bitcoin pulled back sharply on the announcement of U.S. import tariffs. HBTC's embedded hedge helped preserve capital during that volatility, and as markets stabilized and Bitcoin rallied into the second quarter of the year, HBTC participated in the recovery. (The fund returned +19.2% in Q2 2025 and +16.21% at market price from inception through June 30, 2025.) During five Bitcoin sell-offs since HBTC’s inception, the fund has proven its ability to mitigate downside risk and dampen losses for its shareholders. The following chart highlights HBTC performance relative to the spot price of Bitcoin, and is also on the March 31, 2026 HBTC ETF factsheet, which you can [access here](https://www.fortunafunds.com/hubfs/Factsheet.pdf). *![](https://www.fortunafunds.com/hs-fs/hubfs/undefined-2.png?width=530&height=339&name=undefined-2.png)* *Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower than the quoted returns. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. For the fund’s most recent month-end returns, please visit fortunafunds.com. Total annual operating expense ratio is 1.75%. For standardized performance see* [*fact sheet*](https://www.fortunafunds.com/hubfs/Factsheet.pdf)*.* ## **Is a Drawdown an Interesting Entry Point?** After a major selloff, options implied volatility spikes, making protective puts far more expensive to purchase retroactively. HBTC uses a collar structure (put purchase + call spread sale) that helps offset hedging costs even in elevated volatility environments. With the hedge already embedded, there is no need to buy protection after the storm. Investors who want Bitcoin-related exposure but have been cautious about entering a volatile market might find that HBTC offers a way for them to participate in any subsequent recovery - and it has a structured approach to manage any further downside already firmly in place. *Bitcoin's volatility shouldn’t deter potential investors. We believe that it's a feature that, when approached strategically, can create investment opportunities. The philosophy behind HBTC is to “win by losing less” - and, since the ETF’s inception, one that the market has repeatedly tested.* **Sources & References** **\[1\]** Caleb & Brown, "Bitcoin's Market Cycle & Crypto Cycles Chart" (2026). Bitcoin hit an all-time high of $126,296 on October 6, 2025; price declined ~46.7% to ~$67,550 by mid-February 2026. calebandbrown.com. **\[2\]** BlackRock iShares, "Bitcoin Volatility Guide: Trends & Insights for Investors." Since 2014, Bitcoin has experienced four drawdowns exceeding 50%; the three largest averaged ~80% declines; three of four required nearly three years to recover. ishares.com. **\[3\]** Fortuna Funds Q2 2025 Performance Commentary and Fact Sheet (Q2, June 30, 2025). HBTC Market Price return: +16.21% YTD; +19.2% Q2 2025. Source: Bloomberg LP. Data from March 19, 2025. Performance is not a guarantee of future results. **\[4\]** Changelly/Bitcoin Price Prediction Blog (2026). "In 2025, \[Bitcoin\] fell from $126,000 to lows near $80,000 in a matter of months." The 2022 cycle saw Bitcoin fall from ~$69,000 to ~$16,000, a loss of over 77%. changelly.com. **\[5\]** CoinDesk, "Bitcoin's Selloff Data Suggests a 'Mid-Cycle' Correction Rather Than a Price Peak," January 12, 2026. At 95 days from the October all-time high, Bitcoin had seen a 36% drawdown. coindesk.com. **\[6\]** BlackRock, "Four Factors Behind Bitcoin's Recent Volatility," 2025/2026. Shift in Fed outlook: slower rate-cut expectations pushed real yields higher. blackrock.com/us/financial-professionals/insights/exploring-crypto-volatility. **\[7\]** S&P Global, "Bitcoin Volatility Trends: A Deep Dive into Market Dynamics and Risk," March 10, 2026. U.S. spot Bitcoin ETFs held ~$169.5B in assets as of October 2025; declined to ~$117.5B by January 2026. spglobal.com. **\[8\]** Polymarket Market Analysis (June 2026). On June 5, 2026, Bitcoin breached the $62,000 level, triggering $1.5 billion in long liquidations. polymarket.com. **\[9\]** S&P Global, ibid. "Bitcoin's predominant trading structure, comprised of perpetual futures markets that run on leverage and automated liquidations, amplifies price volatility relative to other financial assets." **\[10\]** The Fear & Greed Index is a sentiment indicator that aggregates several market factors — including volatility, trading volume, momentum, and social media activity — into a single score ranging from 0 ("Extreme Fear") to 100 ("Extreme Greed"), intended to gauge whether investors are driven by fear or greed at a given point in time. ## Share this post [mailto:https%3A%2F%2Fwww.fortunafunds.com%2Ffortuna-funds-blog%2Fwin-by-losing-less-why-hbtc-was-built-for-bitcoins-volatile-moments](mailto:https%3A%2F%2Fwww.fortunafunds.com%2Ffortuna-funds-blog%2Fwin-by-losing-less-why-hbtc-was-built-for-bitcoins-volatile-moments) ## Keep reading ### [![](https://www.fortunafunds.com/hs-fs/hubfs/Blog%20Images/Stack.png?width=1200&height=628&name=Stack.png) The Options Recipe Behind HBTC's Strategy](https://www.fortunafunds.com/fortuna-funds-blog/the-options-recipe-behind-hbtcs-strategy) ### [![](https://www.fortunafunds.com/hs-fs/hubfs/Blog%20Images/Investor%20Type.png?width=1200&height=627&name=Investor%20Type.png) Discovering Your Investor Type: Where We Believe HBTC Fits Into a Portfolio You've Already Built](https://www.fortunafunds.com/fortuna-funds-blog/discovering-your-investor-typewhere-we-believe-hbtc-fits-into-a-portfolio-youve-already-built) [Privacy Policy](https://www.fortunafunds.com/privacypolicy) · Legal · © 2025 Fortuna Funds. All rights reserved. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. Investors should carefully consider investment objectives, risks, charges, and expenses. This and other important information is contained in the [fund prospectus](https://fortunafunds.com/wp-content/uploads/2025/03/Fortuna-Hedged-Bitcoin-Fund-Prospectus.pdf) and [summary prospectus](https://fortunafunds.com/wp-content/uploads/2025/03/Fortuna-Hedged-Bitcoin-Fund-Summary-Prospectus.pdf), which should be read carefully before investing. All Fortuna trademarks mentioned are owned by Fortuna Funds, LLC. All other company and product names mentioned are the property of their respective companies. Use of this website is intended for U.S. residents only. Important Risk Information There can be no assurance that the fund will achieve its investment objective. **Bitcoin and Bitcoin-related securities are relatively new investments. They are subject to unique and substantial risks and historically have been subject to significant price volatility. The value of an investment in the Fund could decline significantly and without warning, including to $0. You should be prepared for the possibility of losing your entire investment. The performance of Bitcoin-related securities, and therefore the performance of the Fund, may differ significantly from the performance of Bitcoin.** **Bitcoin Exposure Risk.** The Fund seeks to have significant exposure to Bitcoin. As a result, the Fund’s performance may be disproportionately and significantly impacted by the poor performance of Bitcoin or events materially affecting the Bitcoin ecosystem. The Fund’s exposure to Bitcoin makes it more susceptible to any single occurrence affecting Bitcoin and may subject the Fund to greater market risk than more diversified funds. **Derivatives Risk.** The Fund will obtain exposure to Bitcoin through Bitcoin-related securities. The derivatives used by the Fund may give rise to a form of leverage, which magnifies the potential for gain and may result in greater losses. In some cases, this may cause the Fund to liquidate other portfolio investments at inopportune times. Certain of the Fund’s transactions in derivatives could also affect the amount, timing, and character of distributions to shareholders, which may result in the Fund realizing more short-term capital gain and ordinary income subject to tax at ordinary income tax rates than it would if it did not engage in such transactions. Such distributions may adversely impact the Fund’s after-tax returns. **Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, visit our website at www.fortunafunds.com/hbtc-fund/. Read the prospectus or summary prospectus carefully before investing.** Foreside Fund Services, LLC, distributor. This content, developed by Fortuna Funds, LLC, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice. Fortuna Funds, LLC is an investment advisory firm registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940. SEC registration does not constitute an endorsement of the firm by the Commission, nor does it indicate that the adviser or investment adviser representative has attained a particular level of skill or ability. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Form ADV can be obtained by visiting [https://adviserinfo.sec.gov](https://adviserinfo.sec.gov/) and searching for our firm name. Neither the information contained herein, nor any opinion expressed, is to be construed as solicitation to buy or sell a security or personalized investment, tax, or legal advice.   ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Mark Adams, CIO & Co-Founder, Fortuna Funds", "url" : "https://www.fortunafunds.com/fortuna-funds-blog/author/mark-adams-cio-co-founder-fortuna-funds" }, "dateModified" : "2026-07-28T01:10:54.182Z", "datePublished" : "2026-07-16T17:30:00.000Z", "headline" : "Win by Losing Less? 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