Introduction
March 2025 proved to be a brutal month for markets, and our portfolio wasn't spared. Between surging volatility, crumbling tech valuations, and a sharp crypto correction, the investing environment quickly turned defensive.
What Happened?
US Equity Market
In the United States, equity markets experienced notable declines.
- The S&P 500 shed 4.6% in the first quarter, marking the worst quarterly performance since 2022.
- The Nasdaq Composite plunged 10.5% during the same period also reflecting investor concerns.
- The Dow Jones Industrial Average declined by 1.3%
Technology were particularly affected, with Tesla and Nvidia experiencing substantial losses of 36% and nearly 20% respectively.
Cryptocurrency Market
The cryptocurrency sector has also mirrored the turbulence seen in equity markets.
- Bitcoin's price tumbled down nearly 25% from its January highs
Market Outlook
The recent market downturns underscore the importance of diversification and strategic asset allocation. Investors should remain vigilant, considering both global economic indicators and geopolitical developments. In the cryptocurrency space, the current volatility may present buying opportunities for long term investors, but caution is advised given the sector's inherent risk.
For YMAX, CONY and MSTY, with the drop in the market, Implied Volatility (IV) surged. This may indicate greater monthly distributions moving forward, which would help cushion the NAV (Price) drop with the stronger yield income.
CONY and MSTY were hit harder, as both COIN and MSTR declined sharply amidst the tech selloff and crypto pullback. In comparison, YMAX held up better as it was diversified across many tech counters.
The following is a breakdown of what transpired in our portfolio, key market insights and strategic adjustments for March 2025.
Portfolio Overview (March 2025)
Transaction & Options Overview
March's trading activity was focused on generating premium income and adjusting positions to align with market conditions. The key option transactions included:
Portfolio Breakdown
- CONY (-49%) Cryto Crash Collateral Damage
March was a nightmare for Coinbase and by extension CONY. As bitcoin's 25% drawdown accelerated by the Bybit hack, centralized exchanges such as COIN faced scrutiny and withdrawal spikes. Lower trading volumes and negative sentiments drove the stock lower, slicing through CONY's NAV despite high premiums and call writings.
- MSTY (-16%) Bitcoin's Whiplash Hits Home
MSTY was spared the worst, but still ended deep in negative territory. MicroStrategy's strategy of holding massive Bitcoin reserves with leverage backfired this month. As BTC slumped, MSTR followed and so did MSTY. The ETF did, however benefit from soaring implied volatility, cushioning the drawdown with substantial option income.
- YMAX (-28%) Tech Gets Tagged
Although YMAX outperformed the others, it wasn't immune. The tech heavy Nasdaq's 10.5% quarterly drop (it's worst since 2022) dragged down YMAX's underlying holdings. However, thanks to it's broader diversification and disciplined call writing strategy, The ETF delivered strong income, softening the blow on total returns.
- Overall portfolio (-28%) loss reflects a month where macro headwinds and sector specific risks collided.
Lessons from March
- Covered calls work better in a flat or modestly volatile market, but not during sharp drawdowns.
- Crypto-tied ETFs like CONY and MSTY offer juicy yields, but come with amplified risks.
- YMAX's diversified structure can offer some shelter, but not immunity.
Portfolio Implications and Strategic Adjustments
Strategic Adjustments
These changes signal a tactical re-engagement with risk and potentially a better income trajectory.
Portfolio Implications
March Strategy Paid Off
- The decision to increase allocation captured part of the rebound from oversold levels.
- YMAX and MSTY showed stabilization.
Looking ahead to April 2025
- Bitcoin support at $80k remains key. If breached, expect more downside for MSTY and CONY
- Implied Volatility is still elevated. Excellent for premium income
- Broader markets remain jittery. Look into diversification into CSPX
- Expect modest income recovery in April if tech and crypto stabilize.
📬 Help Improve This Blog
To make this blog more comprehensive, I'm currently seeking:
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💬 Reader feedback on option strategies or ETF income ideas
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📈 Requests for visual charts (bar/line graphs of dividends or drawdowns)
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📊 Suggestions for additional diversification ETFs or hedging tools
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🧮 Any interest in backtesting or rolling yield projections for CONY/MSTY/YMAX
If there’s anything you’d like to see added, or have specific questions about income ETFs or option strategies, feel free to reach out or drop a comment!