No Free Lunch Fund Q1/2025 Update
- No Free Lunch Fund: -30.85%
- Bitcoin: -12.53%
- Ethereum: -46.72%
The first quarter of 2025 was, to put it mildly, a cold shower for investors. Markets reminded us — yet again — that no one really knows anything. Price action was largely driven by President Trump and his tariff proclamations, which, like many things in politics, may be reversed just as easily as they were introduced — assuming some kind of trade deals materialize.
Full disclosure: I don’t pretend to fully understand how tariffs work, and I won’t try to fake it here. Let’s just agree to leave macroeconomic trade policy outside the scope of this report.
What I can say is that this was one of the toughest quarters we’ve seen — not just for us, but likely for anyone navigating these markets. The challenge wasn’t just the volatility, but the sheer volume of conflicting signals. One day there’s a tweet about a crypto reserve backed by “various assets,” the next day it’s about a stockpile. Interpret that how you will.
This wasn’t a quarter to chase upside — it was about survival. We focused on preserving capital, managing risk, and staying liquid. And in this environment, staying upright felt like a win.
Bitcoin, Bitcoin, Bitcoin
What clearly stood out last quarter was Bitcoin. As mentioned in our previous update , Bitcoin continues to stand in a league of its own — and the more we analyze the market, the more this thesis holds. It’s not just a crypto asset anymore. It’s increasingly behaving like a macro asset, while platforms like Ethereum and Solana fall more into the “tech” investment bucket. Same underlying tech (blockchain), totally different fundamentals.
What caught my attention is that the financial infrastructure around Bitcoin is on another level. Nothing else in crypto comes near. It’s the only asset in the space that can absorb massive, TradFi-grade liquidity without breaking a sweat. Let’s talk about Saylor and MSTR for a second. Yes, it looks like he buys every local top. But there’s a method to the madness. MSTR premium is highest when Bitcoin price is highest. The flow looks like this: He sells MSTR shares, raises cash, and buys more Bitcoin. I don’t really get it, why such a market veteran buys almost immediately with fresh cash, but it is when the premium is highest and he can get the best ratio to buy new Bitcoin so why not, it is certainly a good indicator to watch
Chart 1: MSTR purchases in Q1/2025
Source: Strategytracker
Watching MSTR and its clones operate is starting to feel like watching real estate investment trusts in the early 2000s. The playbook is simple: raise cheap capital, deploy it into a long-duration, high-volatility asset, and pray the math holds. In real estate, competition compresses yields. In Bitcoin? Well, Saylor created a whole new asset class for himself. He won the game of financialization before most even knew it started.
The real question is: who’s fronting him the cash at 0%? Word on the street is it’s fixed income managers — the kind of people who hunt for 12 basis points like it’s truffle season. To them, a no-yield bond with a Bitcoin call option stapled on top is spicy enough to warrant a dabble. And just like that, the $130 trillion fixed income machine is sliding a few chips across the table. If that doesn’t scream “Bitcoin is no longer just crypto,” we don’t know what does. ETFs are buying. Corporates are buying. Saylor’s buying. His copycats are buying. But it’s all Bitcoin, Bitcoin, Bitcoin. So, what about everything else?
The Elusive Alt Season
We still believe in alt season — but not the one from 2021. That era ran on hopium. The next one will need utility, product-market fit, and actual users. Our exposure to alts remains focused and disciplined. We continue to hold ETH and SOL as core positions.
We’re here because of DeFi — it’s what pulled us down the rabbit hole. Still one of the few corners of crypto delivering real, repeatable utility.. Stablecoins are a perfect case in point — and the U.S. is finally waking up to this. There is a new regulation being developed in USA and they aim to tackle the three things that matter: definition, payments, and yield.
The definition part is simple — if you want to call something a “stablecoin,” you need to meet some basic standards. Just like you can’t call yourself a bank without capital requirements, you shouldn’t be able to slap “stablecoin” on your token unless you meet clear criteria.
Then there’s payments. Once stablecoins are officially recognized, you can actually build serious payment rails on top of them. Problem is, in the U.S., most people already have dollars in their bank accounts — so the stablecoin value prop isn’t obvious. Unless… we talk about yield.
Here’s where it gets interesting.
At some point, banks stopped paying yield to customers. Sure, you can park your money in a savings account, but even with high rates, the return is negligible. In crypto, yield is built-in. Block-by-block, composable, transparent. This has the potential to force the legacy system to keep up — or die trying.
Case in point: Tether made double the money last year than BlackRock. Read that again. U.S. policymakers now face a simple decision: should this $13 billion go to a private offshore entity — or to everyday users via regulated stablecoins? Feels like an easy call.
Stablecoins also have the power to disrupt payments. Every time you tap your card, Visa and Mastercard, JP Morgan and Stripe and many others siphon off 1.5%–3.5%. That’s a stealth tax. Cut that out and merchants keep more, consumers pay less, and we quietly deflate inflation. But the catch is obvious: banks love those fees. They’ll lobby hard to block any stablecoin that pays yield or threatens the payments cartel.
Still, this isn’t a matter of if — only when. Eventually, banks will show up, declare stablecoins “inevitable,” and roll out their own branded versions of stablecoins and the rest will be history. Writing this gives me goosebumps. It’s rare to see a system this broken and a solution this clear. We’re watching it unfold in real time — and it’s hard not to get hyped.
Overall the first quarter for a humbling lesson. I thought that with Trump’s victory we would see the rise of whole crypto market, but what we saw in Q1 was brutal.
Going forward we are planning on launching our neutral share class at the beginning of May and Bitcoin share class at the beginning June. We are very exited for this products and we will bring you more updates in the next report.
Thank you, for trusting us in the chaos.