A Big Crypto Hedge Fund Lost 30% Last Year — Now It’s Betting on Stablecoins Instead
Brevan Howard Digital is reportedly pivoting toward stablecoins after a rough 2025 — here's what that shift could signal for everyday holders.
One of the biggest institutional players in crypto is reportedly changing its game plan after a painful year. Brevan Howard Digital, the crypto investment arm of hedge fund giant Brevan Howard, is said to be building out a stablecoin-focused strategy following a rough 2025, according to a Financial News report citing people familiar with the matter.
It’s a notable shift for a fund that has long been known for making big directional bets on cryptocurrencies. For everyday holders, it’s a signal worth paying attention to: when the “smart money” starts moving away from pure price speculation and toward the plumbing of crypto — like stablecoins — it often means the industry’s centre of gravity is shifting too.
A rough year forced a rethink
Brevan Howard Digital, known as BH Digital, has been Brevan Howard’s dedicated digital-asset business since 2021, giving big investors exposure to everything from crypto tokens to blockchain infrastructure and venture bets. But last year hit hard. The fund reportedly lost nearly 30% in 2025, dragged down by the collapse of Mantra’s OM token and softer returns from its venture investments.
Assets under management, which once peaked around $2.5 billion, have reportedly slipped below $2 billion despite investors still putting new money in. That’s the kind of drawdown that forces any fund manager to take a hard look at risk.
Under new Chief Investment Officer Chris Rayner-Cook, who also leads the fund’s crypto treasury solutions, BH Digital has reportedly tightened its risk controls and has clawed back to modest positive performance in recent months.
Why stablecoins, specifically?
The clearest evidence of BH Digital’s new direction came last week, when partner Colleen Sullivan announced the fund’s backing of Augustus, a startup building what it calls a “Global Dollar Bank” on stablecoin rails. Sullivan said stablecoins have let U.S. dollars move “24/7/365,” while ordinary banking is still stuck with fixed hours and legacy payment systems. Augustus, she said, wants to rebuild banking on stablecoin infrastructure with AI baked in from day one.
That bet lines up with the broader numbers. According to DeFiLlama, the stablecoin market has now grown past $330 billion, fuelled by rising use in payments, remittances, DeFi and tokenized asset settlement. Even outside the U.S. dollar world, adoption is spreading — Japan’s yen-pegged JPYC stablecoin is now reportedly accepted by more than 2,000 contractors.
What it means for your coins
BH Digital hasn’t abandoned the rest of crypto. Data from CryptoRank shows the fund has backed 61 crypto projects to date, with a tracked portfolio spanning tokens like XRP, Morpho, Plume, Ethena (ENA) and IAG, alongside DeFi and infrastructure bets. Stablecoins appear to be an addition to that mix, not a replacement.
For everyday holders, the takeaway isn’t that Bitcoin or altcoins are suddenly out of favour with institutions — it’s that big money is increasingly treating stablecoins as core financial infrastructure rather than a side product. If more hedge funds and asset managers follow BH Digital’s lead, it could mean deeper liquidity, more real-world payment use cases, and steadier plumbing underneath the crypto market you already hold coins in. It’s also a reminder that even the largest, most sophisticated crypto funds aren’t immune to bad years — risk management matters at every level, from billion-dollar funds down to a personal wallet.
Read more: Coinbase’s CEO Says Robots Will Out-Trade You in Crypto — Here’s What That Means for Your Coins
