Cryptocurrency markets faced new pressure in May, with rising geopolitical risks and declining investor risk appetite weighing on digital assets, according to a report by Gate Private Wealth Management. While major cryptocurrencies fell during the month, quantitative investment products moved in the opposite direction, with most strategies posting positive returns and limiting losses despite market volatility.
The report showed that the gap between the performance of crypto assets and the results achieved by quantitative trading strategies is widening. At the same time, broader economic indicators point to continued growth in business investment, while inflation remains a key factor influencing expectations ahead of the Federal Reserve’s June policy meeting.
Crypto assets retreat as market sentiment weakens
Both Bitcoin and Ether ended May in decline as risk demand worsened across the digital asset market. According to the report, Bitcoin fell by about 2.9% during the month, while Ether fell by more than 11%.
The decline comes as geopolitical tensions escalate and investors reduce exposure to risk-sensitive assets. The report noted that Ether redeemed the gains accumulated since April 2025, and Bitcoin also hit new monthly lows during the same period.
In contrast, US stocks continued to rise. The report cited stronger-than-expected earnings from companies in the artificial intelligence sector as factors for the stock market’s strength, as well as rising expectations that interest rate cuts could come before the end of the year.
Quantitative strategies bring positive results
Despite the downturn in the cryptocurrency market, quantitative funds reported strong performance in May. The report states that 90% of the strategies considered generated positive returns during the month, contributing to the overall recovery in net asset value of the entire fund portfolio.
Among the instruments analyzed, the Interstellar Hedge (USDT) strategy produced the strongest results. The strategy recorded a cumulative return of 18.6% and produced positive returns in all 23 periods studied in the report, resulting in a 100% win rate.
Economic outlook focused on inflation and policy
Looking ahead, the report noted that the economy’s momentum, supported by business spending, will continue. Business investment expanded at an annualized rate of 6.4% in the first quarter, with investments related to artificial intelligence continuing to emerge as a key contributor to growth.
Inflation was identified as a major economic risk. The report said that given the current situation, the federal funds rate is expected to remain unchanged at the next Federal Open Market Committee meeting in June.
The report also highlighted trends surrounding stablecoin regulation. With enforcement actions related to the GENIUS Act revealed, the structure governing stablecoins is moving from legislation to enforcement, marking the next stage in regulatory development.
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