May 31, 2025
Commentary
Year-to-date to May 31, the Ninepoint Crypto and AI Leaders ETF generated a total return of -8.33%. For the month, the Fund generated a total return of 17.33%.
Ninepoint Crypto And AI Leaders ETF - Compounded Returns¹ As of May 31, 2025 (Series ETF CAD- TKN) | Inception Date: January 27, 2021
1M |
YTD |
3M |
6M |
1YR |
3YR |
Inception |
|
|---|---|---|---|---|---|---|---|
Fund |
17.33 |
-8.33 |
8.42 |
-12.07 |
15.77 |
23.04 |
13.72 |
After a choppy start to the year driven largely by macroeconomic factors, the market reached an inflection point in May. Positive news in both the crypto and AI sectors took center stage, helping renew investor sentiment and drive strong tailwinds across our portfolio. As a result, May was the fund’s strongest month of performance in 2025, and its best since last November, when Trump’s election victory triggered a broad market rally, particularly across cryptoassets and related public equities.
Tether, the world’s largest stablecoin issuer, released its Q1 FY25 attestation, reporting $1 billion in operating profit, largely from interest earned on nearly $120 billion in U.S. Treasuries backing its stablecoin reserves. That follows a record 2024, where Tether pulled in $13 billion in profit with fewer than 150 employees, making it the most profitable company per employee in the world. Against that backdrop, and with momentum building behind two key stablecoin bills, the Genius Act and the Stablecoin Act, it wasn’t surprising to hear that a group of major U.S. banks, including JPMorgan, Bank of America, Citigroup, and Wells Fargo, have begun exploring the launch of a joint stablecoin.
Ethereum successfully underwent its largest network upgrade in nearly three years, known as ‘Pectra,’ which addressed core limitations and improved scalability, security, and overall user experience. The smooth execution was met with enthusiasm from investors, with ETH surging more than 20% in the 24 hours that followed. Adding to the bullish momentum, SharpLink announced a $425 million financing round led by Consensys and top crypto VCs to pursue an Ethereum treasury strategy. The company aims to become for Ethereum what Strategy (formerly MicroStrategy) is for Bitcoin: a permanent capital vehicle with Ethereum on its balance sheet, trading at a premium to net asset value, and issuing stock to accumulate more Ethereum. To understand the combined impact of these two developments in revitalizing sentiment, consider this: Ethereum investment products saw $890 million in net inflows globally in May, up almost 25x from just $35 million the month prior in April. As a result, Ethereum gained nearly 40% in May, significantly outperforming Bitcoin and Solana, which rose just 8.5% and 4.6%, respectively.
On the public equity front, all eyes were on Nvidia ahead of its Q1 FY26 earnings on May 28, with investors closely watching the potential impact of the Trump administration’s recent export restrictions on its H20 chips. Despite taking a $4.5 billion charge related to excess inventory of these restricted chips, Nvidia delivered stronger-than-expected results, driven by 73% Y/Y growth in its data center business. For Q2, the company guided to approximately $45 billion in revenue, below analyst expectations, though management noted sales would have been roughly $8 billion higher were it not for the H20 restrictions. Still, the market reacted positively to the results, with NVDA shares rallying post-earnings and closing the month up 25%.
Looking ahead, two powerful trends are taking shape that we’re watching closely: the emergence of a crypto IPO wave and the rise of public crypto treasury strategies. As we’ve long noted, 2025 has the potential to be the “year of the crypto IPO.” That prediction may soon play out, with Circle, the world’s second-largest stablecoin issuer, set to go public in the first week of June. Its debut will serve as a key litmus test for investor appetite. If successful, it could pave the way for a backlog of high-quality crypto companies to follow suit including the likes of Bullish, Gemini, Kraken, Anchorage, Chainalysis, Figure, MoonPay, Ripple, Consensys, and others. On the public crypto treasury front, activity is accelerating; new entrants seem to be emerging almost daily. The SharpLink announcement is likely to further catalyze this trend, particularly among companies targeting alternative cryptoassets beyond Bitcoin and Ethereum. We’re already seeing this play out with Solana-focused firms like Sol Strategies, DeFi Development Corp, and Classover, as well as XRP-aligned firms like VivoPower and Webus.
We have raised cash to a top portfolio position to maintain flexibility as this investment universe materially expands, allowing us to move quickly on high-conviction opportunities that align with our mandate and offer strong risk-adjusted return potential.
Alex Tapscott, CFA
Ninepoint Partners