The net asset value of a crypto fund is a number that most unitholders look at without wondering where it comes from. The Binance hack on October 29 showed that this figure can become difficult to establish. For several days, the largest platform on the market blocked the withdrawals of all its customers. The following Monday, Mercado Bitcoin, in Brazil, in turn froze deposits and withdrawals, with no resumption date. For an individual, the wait is painful. For a fund which holds part of its assets on the platform concerned, it poses a calculation problem: a share price must still be published, while a fraction of the portfolio can no longer be moved.
This seventh installment of our series explains what’s behind this number. You will see how the net asset value of a crypto fund is calculated, why the price chosen for a bitcoin depends on a time and a source fixed in advance, what the fund can do with assets immobilized on a platform, and why this choice decides who, among the investors, bears the possible loss.
This article is brought to you by DCY. To learn about their approach, visit dcy.fund.
Key Points
The net asset value (NAV) is the net value of the fund divided by the number of shares. This is the price at which one enters and exits, and it is calculated by an administrator separate from the manager.
For cryptos listed everywhere at different prices, the NAV is based on a price source and a statement time recorded in the fund documents. On October 10, 2025, USDe fell towards $0.65 on Binance while it held close to $1 elsewhere: the source changes the result.
When assets are blocked on a platform, the fund can keep them at their market price, apply a discount to them, isolate them in a separate compartment (side pocket) or suspend the calculation of the NAV.
Keeping assets 100% frozen favors those who exit right away, at the expense of those who stay. In our example, the difference reaches €1.11 per share.
The calculation itself is simple. We add up everything the fund owns (cryptos, stablecoins, positions on derivatives, cash in the bank), we remove everything it owes (accrued management fees, provisioned performance fees, invoices from service providers), and we divide this net amount by the number of shares in circulation.
Consider a fund that holds the equivalent of €10.4 million in assets and owes €200,000 in fees. His net assets are worth 10.2 million. If he issued 85,000 shares, each is worth 120 euros. A new investor who contributes 120,000 euros receives 1,000 shares, and a holder who returns 1,000 receives the same amount, possible exit costs aside.
Two points must be remembered. The first: the performance commission is provisioned in the NAV over time, even before being taken. The published price is therefore net of fees already acquired by the manager, with the high water mark mechanism described in our fifth part. The second: the calculation does not fall to the manager. In a well-organized fund, it is an independent administrator who reconciles the balances of the platforms, banks and wallets, applies the valuation rules and finalizes the figure.
The frequency varies from one fund to another: daily, weekly or monthly. It also sets the pace of entries and exits, since you can only subscribe or redeem on a date when a NAV is calculated.
What price for a bitcoin?
A CAC 40 share has an official closing price. A bitcoin does not have one. It is traded continuously, seven days a week, on dozens of platforms, and its price differs slightly from one to another. To value a portfolio, you must therefore choose a reading time (the cut-off, often midnight UTC) and a source: the price of a given platform, an average of several platforms, or an index published by a specialized supplier.
Normally, the difference between these options is measured in tenths of a percent. On crisis days it can become huge. On October 10, 2025, during the crash that liquidated billions of dollars of positions in a matter of hours, Ethena's USDe traded near $0.65 on Binance, while it remained near $1 on most other exchanges. A fund that valued its USDe at the Binance price that evening showed a 35% loss on that line. The same fund, with a multi-platform index, would have seen almost nothing.
Both methods are defendable. On the other hand, a manager should not be able to choose the source after the fact, depending on the figure it gives. The valuation rule must therefore appear in the fund documents, and remain the same from one month to the next. For derivatives, the logic is identical: a perpetual contract is valued at the mark price of the platform, which is also used to calculate liquidations, and not at the last price exchanged.
Assets blocked on a platform
Let’s get back to the withdrawal freeze. A fund's assets remain displayed in its account, the platform sometimes continues to work for trading, but nothing comes out. The fund has four ways of treating these holdings in its NAV.
Keep them at their market price. This is the default solution when the platform is solvent and the blockage is technical. It becomes dangerous if there is doubt about the platform's ability to return the funds.
Apply a discount to them. The administrator reduces their value by a percentage that reflects the probability of loss. The choice of percentage is delicate, and it is revised with each calculation.
Isolate them in a side pocket. The blocked assets leave the main wallet and go into a separate compartment, held by the investors present at the time of the freezing, in proportion to their shares. The main NAV now only contains liquid assets, and entries and exits are made at this price. What is collected on the platform will later return only to the holders of the side pocket.
Suspend the NAV calculation. Without a reliable price, the fund stops calculating and closes subscriptions and redemptions. Most fund documents provide for this in the event of an event that prevents the assets from being valued, but a long suspension weighs heavily on investor confidence.
Who pays for the loss: a numerical example
Depending on the option chosen, the possible loss does not fall on the same investors: those who exit during the freeze, or those who stay.
A fund is worth 10 million euros, divided into 100,000 shares at 100 euros. Two million are stranded on a frozen platform. An investor requests the redemption of 10,000 shares.
If the fund keeps the assets blocked at 100%, the NAV remains at 100 euros. The investor receives 1 million, paid with liquid assets. A few months later, the platform only returned half of what it held: the fund lost 1 million. There are 8 million left for 90,000 shares, or 88.89 euros per share.
If the fund had applied a 50% discount to the blocked assets from the start, the NAV would have fallen to 90 euros. The outgoing investor would have received 900,000 euros, and those who remain would keep shares at 90 euros once the recovery has been made.
In the first case, the one who exited quickly received 100,000 euros too much, and each of the remaining holders lost 1.11 euros per share to pay them. This is the reason for discounts, side pockets and suspensions: to prevent information known to everyone, but not yet integrated into the price, from allowing the quickest to exit to the detriment of others.
FTX, the previous one
In November 2022, the FTX bankruptcy posed exactly these questions, on a much larger scale than a freeze of a few days. Several funds had a significant portion of their assets on the platform. Galois Capital, a fund specializing in crypto derivatives, had left around half of its capital there. It closed a few months later, returning most of the assets that were not on FTX to investors and keeping the debt separate, unable to put a price on it.
The aftermath of the bankruptcy is instructive. FTX's creditors were repaid more than 100% of their debt, but in dollars, based on prices on the day of the bankruptcy, when bitcoin was worth around $16,900. So a bitcoin-denominated fund picked up dollars where it held bitcoins, and missed out on all the rally that followed. This is the difference between yield in dollars and yield in bitcoin that we described in our fourth part, applied to a bankruptcy debt.
What an investor can ask
Behind each published VL, there are calculation rules. Four questions allow you to know them:
Who calculates the net asset value, how often, and how many days after the valuation date?
What price source and reporting time are used for cryptos and derivatives, and where is this rule written?
How much of the assets are held on the same platform, and how many platforms does the fund use?
If a platform freezes withdrawals, who decides how the frozen assets are handled, and how are investors informed?
The first three answers must be specific and appear in the fund documents. The fourth cannot be as much: a freeze on withdrawals can last two days or two years, affect a solvent platform or a bankrupt platform, and no manager can write in advance the right answer to each case. The investor can, however, know who will make the decision, on what elements, and within what time frame he will be notified.
