As of March 13, 2025, the Terramatris crypto hedge fund’s value has sharply declined to $5,120, representing an enormous drop of -34.47% from last week. This decline follows a massive selloff in the crypto markets, pushing Ethereum below $2,000 and amplifying market-wide panic. Additionally, we repaid a $950 investment that we had received just last week, further impacting our capital reserves.
Market Overview
The past week has been one of the most turbulent in recent months. Speculation-driven panic selling and macroeconomic instability have fueled a severe downturn in crypto prices. Bitcoin and Ethereum both plunged significantly, with Ethereum’s break below the $2,000 level exacerbating losses for many leveraged traders. Sentiment remains highly fragile as traders assess the likelihood of continued downward pressure.
Portfolio Adjustments
Given the extraordinary volatility, we refrained from adding new leveraged positions and focused on damage control. Our primary approach has been capital preservation and strategic risk mitigation.
- Repayment of Capital: We returned a $950 investment that was received last week, impacting our available capital but fulfilling financial obligations responsibly.
- ETH Perpetual Futures Exposure: Currently holding 1.1 long ETH perpetual futures contracts, with a break-even price at $2,841. With Ethereum now trading at approximately $1,875, this position is deeply in the red, with a current loss of approximately -$966 per ETH. As we have call options expiring tomorrow (March 14, 2025) - we look to generate additional options premium thus lowering our break even price under $2,800
- Put Option Management: Given Ethereum’s decline, we have maintained a defensive approach and are not opening new put trades at this time. Instead, we are actively managing existing contracts and adjusting covered call strategies to mitigate losses where possible.
- Covered Calls Strategy: We continue to sell covered calls on our ETH positions to generate some yield and reduce overall exposure to further downside risk.
TerraM Token Update
The TerraM token on the other hand is performing better than the most of the market participants.
- Current TerraM Price: $2.60 (a noticeable increase from last week's $2.45)
- Liquidity & Slippage: While slight improvements were made, slippage remains a major concern. Exchanging 200 TerraM tokens to USDC currently incurs a -36.78% slippage, slightly better than last week’s -37.99%.
We are actively working on strategies to stabilize TerraM liquidity and mitigate extreme price swings. However, given the current market turmoil, improvements may take longer than anticipated. We are not expecting increasing liqudity or another buyback until total funds value reaches $8,000
Looking Ahead
Market conditions remain precarious, with further downside risk still a possibility. Our immediate focus is on capital preservation and risk management, ensuring we do not take unnecessary risks in an unpredictable market environment. While macroeconomic uncertainty persists, institutional interest in crypto remains strong, providing a glimmer of long-term optimism.
We will continue to monitor market trends and adjust strategies accordingly, aiming for stability and recovery in the coming weeks.
Disclaimer: This update is for informational purposes only and should not be considered financial advice. Please conduct your own research before making any investment decisions.