Rotation Captured, Risks Absorbed – Outperformance Despite Friday's Shock

Asset	Positioning Transition	May 30 Price	Weekly High	June 6 Price	Change	Verdict
BTC	40% → 60% → 65%	$103,000	$109,600	$104,500	+1.4%	✅ Core BTC exposure rebuilt into strength
ETH	8% → 15% → 20%	$2,460	$2,800	$2,525	+2.6%	✅ ETH inflows supported thesis despite volatility
SOL	2% → 10% → 5%	$147	$166	$144	–2.0%	✅ Tactical altcoin rotation protected from downside

What We Got Right

✅ Rebuilt Exposure as Sentiment Recovered
We added to BTC, ETH, and SOL positions throughout the week as retail buying returned and institutional flows rebounded. This allowed us to benefit from the early-week rally while managing risk during Friday’s flush.

✅ Timely ETH Overweight Paid Off
Ethereum ETF inflows surged midweek, and our increase in exposure captured its outperformance versus BTC. ETH’s strength relative to its macro backdrop helped us lean into the right altcoin at the right time.

✅ Solana Trim Minimized Late-Week Drag
We added to SOL early as altcoins rallied but trimmed the position before Friday’s geopolitical-led drop. This preserved performance as high-beta assets came under pressure.

Surprises

❌ Price Action Disconnected from Fundamentals
Despite strong macro data (cooling inflation, steady ETF inflows), the market sold off sharply on Friday. We held through the volatility but underestimated how sensitive sentiment had become to narrative shocks—like the Musk–Trump feud and Middle East escalation.

❌ Altcoin Overweight at the Wrong Time
We entered the back half of the week with an overweight position in altcoins, particularly ETH and SOL. When geopolitical risk spiked, those assets suffered disproportionately. Our partial trimming helped, but we were still exposed to deeper losses than we would’ve accepted in a cleaner macro setup.

Key Lessons

? ETF Flow Leadership Signals Rotation
ETH overtaking BTC in ETF flows marked a clear rotation moment—one we caught and positioned around. This underscores the importance of watching flow leadership, not just total volume.

⚠️ Narrative-Driven Liquidations Can Override Fundamentals
The Musk–Trump spat, followed by geopolitical escalation, triggered outsized liquidations despite a supportive macro backdrop. This is a reminder to respect risk even in “healthy” markets.

? Reactivity Beats Prediction
Rather than trying to predict every catalyst, our strength came from adapting quickly: rotating into ETH early, trimming SOL before the drop, and holding BTC as an anchor asset.

Final Takeaway

This week was defined by early strength, midweek optimism, and late-week panic . We navigated it with a balanced approach—rebuilding exposure as flows and sentiment improved, and tactically reducing risk as volatility returned. Our ETH overweight captured rotation upside, while timely SOL trims limited downside.

With inflation easing, ETF flows stabilizing, and risk-off pressure possibly peaking, we’re positioned to benefit from a rebound—but remain cautious given geopolitical uncertainty and macro sensitivity.

Understanding Our Benchmark and Positioning Terms

Our benchmark is a market-cap weighted index composed of Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) — the three most widely held and institutionally tracked assets in the space. Weightings are determined based on each asset’s relative market capitalization at the start of the review period.

When we refer to “neutral weight,” we mean a position aligned with the benchmark weight. An “overweight” position indicates we hold a larger allocation to that asset than its benchmark weight, reflecting higher conviction or expected outperformance. Conversely, an “underweight” position means our allocation is below the benchmark weight, typically due to near-term risks or weaker conviction.