Market Overview
March 2026 was defined by the Strait of Hormuz crisis. Escalation of geopolitical tensions in the region disrupted a key global oil route, affecting roughly one-fifth of daily oil flows. Energy prices surged, impacting shipping, LNG shipments, fertilizer exports, and broader commodity markets. The situation drew comparisons to previous energy shocks, highlighting the potential for supply-driven inflation and macroeconomic ripple effects.
While most risk assets came under pressure, crypto showed relative resilience. Bitcoin traded broadly flat, while Ethereum modestly outperformed. This marked the first neutral-to-positive monthly close for both assets since August-September 2025, breaking a prolonged string of red months. This resilience underscores crypto’s role as a differentiated risk asset during periods of macro volatility.
Energy Shock and Macro Implications
Disruption in the Strait of Hormuz removed a significant portion of global seaborne crude supply from circulation. Regional producers adjusted output and utilized alternative pipelines, but logistical constraints limited throughput. The energy shock contributed to rising costs for shipping, fertilizers, and food commodities, reviving stagflation concerns.
In parallel, central banks maintained policy rates, reflecting a balance between inflation pressures and slowing growth. Market participants recognized the dual risk: recessionary pressures could lead to emergency monetary easing, creating a potentially supportive environment for risk assets, including crypto.
U.S. fiscal developments were also notable, with national debt reaching record levels and Fed leadership transitions remaining in focus. These macro factors shaped market expectations and risk sentiment throughout the month.
Regulatory landscape: pragmatism and uncertainty
March delivered a mixed bag of regulatory signals, but the positive developments were substantial.
On March 11, the SEC and CFTC signed a historic Memorandum of Understanding, committing to coordinated oversight and a "fit-for-purpose" regulatory framework for crypto assets. The agencies explicitly referenced the principle of "minimum effective dose of regulation" — a clear signal of intent to support innovation without suppressing it. On March 17, they followed with a joint interpretive release establishing a five-part taxonomy for crypto asset classification and identifying 18 major cryptocurrencies as digital commodities rather than securities. This represents the most significant step toward U.S. regulatory clarity to date.
The White House approved the inclusion of crypto assets in 401(k) retirement plans, opening the door to the $12 trillion U.S. retirement savings market.
However, the revised CLARITY Act text introduced a provision that would prohibit yield payments on stablecoin balances held on custodial platforms — a direct challenge to the business models of companies like Circle and Coinbase. The stablecoin yield language, announced by Senators Tillis and Alsobrooks on March 23, was met with criticism from the crypto industry. The Senate Banking Committee markup is now targeted for late April.
And on March 26, David Sacks' tenure as the White House's AI and crypto czar ended after he reached the 130-day limit for special government employees. He transitioned to co-chair PCAST (the President's Council of Advisors on Science and Technology). The administration does not plan to appoint a replacement. The industry's most senior White House advocate exits at the most critical stretch of the CLARITY Act's Senate timeline — with Senator Moreno warning that failure to advance the bill by May could push it off the calendar until after the 2026 midterms.
Institutional flows and adoption
Institutional activity demonstrated renewed interest in crypto. Bitcoin ETFs saw positive inflows after months of outflows, while Ethereum-focused products attracted investor attention due to combined price and yield exposure.
Major financial platforms continued initiatives to integrate crypto trading for their client bases, signaling broader adoption. Surveys indicate that institutions are increasingly considering higher allocations to digital assets, with regulatory clarity cited as a key driver for confidence.
Charles Schwab confirmed plans to launch Schwab Crypto in the first half of 2026, enabling its large client base to trade BTC and ETH directly through brokerage accounts. The National Bank of Kazakhstan announced plans to invest $350 million in crypto assets from its foreign reserves. A Coinbase/EY-Parthenon survey showed that 73% of institutional investors plan to increase their crypto allocations by 2026, with regulation cited as the key catalyst.
Capitulation and forced sales
March revealed the extent of selling pressure that had been building beneath the surface — and in some cases, explained price movements from previous months.
MARA (Marathon Digital) executed the most significant move, selling 15,133 BTC (approximately 28% of its reserves) between March 4 and March 25 for approximately $1.1 billion. The proceeds were used to repurchase $1 billion in convertible debt at a roughly 9% discount, reducing outstanding convertible notes by approximately 30%. The company is pivoting toward AI infrastructure, partnering with Starwood Capital Group to build over 1 gigawatt of digital infrastructure capacity.
Miners were under extreme economic pressure. With average production costs around $88,000 per BTC and market prices well below that level, mid-March losses were approximately $19,000–$22,000 per coin mined.
Galaxy Digital quietly sold 3,100 BTC (~$218 million) in early March, followed by additional transactions later in the month. Riot Platforms sold 3,778 BTC during Q1 2026, reducing its reserves to 15,680 BTC. Nakamoto Inc. sold 284 BTC at a 40% loss — coins purchased at $118,171, liquidated at approximately $70,422 — to cover debt and operational costs. The Kingdom of Bhutan accelerated state-level selling, disposing of over 1,000 BTC in March alone, reducing its reserves from approximately 13,000 BTC at the end of 2024 to around 4,450 BTC.
The scarcity milestone
On March 9–10, the 20 millionth Bitcoin was mined at block height 939,999 by Foundry USA. Over 95% of all Bitcoin that will ever exist is now in circulation. The remaining 1 million BTC will take approximately 114 years to mine. An estimated 2.3 to 3.7 million BTC are considered permanently lost, meaning the real available supply is well below 20 million. Bitcoin's annual inflation rate is now below 0.85% — less than half of gold's estimated supply growth rate.
Stablecoin liquidity and capital returns
Two additional factors provided structural support. On March 13, USDC market capitalization reached an all-time high of $81.1 billion, with over $3 billion minted in early March. Tether issued an additional $1 billion on March 11–12, bringing total USDT supply to $183 billion. Stablecoin inflows are a classic leading indicator — these funds typically flow into crypto asset purchases.
On March 31, the FTX estate began distributing $2.2 billion to creditors. A significant portion of these funds is expected to return to the crypto ecosystem.
Summary
The bear case for April remains substantial: institutional ETFs continue to see mixed flows, miners are operating at steep losses, and corporate treasuries are actively de-risking. Capitulation from large holders — including sales at significant losses — signals that even long-term believers are feeling the pressure.
But market history suggests that capitulation often precedes recovery. The structural tailwinds are real: record stablecoin liquidity, a clear movement toward regulatory clarity, integration into the largest brokerage and banking platforms, and a supply profile that has never been tighter.
Against this backdrop, we now break down how each strategy performed and what our outlook is under current market conditions.
Liquidity Providing Strategies Snapshot
- March performance:
USDT: 5% APY, 0.41% monthly yield
USDC: 5% APY, 0.41% monthly yield
ETH: 4% APY, 0.33% monthly yield
BTC: up to 7% APY, 0.42% monthly yield
AVAX: 7% APY, 0.56% monthly yield - April APYs: remain unchanged
- Risk profile: Low – Medium
March performance was consistent with the strategies' yield corridor under current market conditions.
When this strategy performs best
Liquidity Providing strategies typically perform best during periods of market expansion and elevated volatility.
Higher trading activity and stronger price movements increase fee generation and improve capital efficiency.
At the end of each month, APY may be adjusted upward for the following month if market conditions support higher yield generation.
When performance may be lower
Performance tends to be more moderate during declining or range-bound markets with reduced trading volumes.
Lower activity directly impacts fee generation and limits yield potential.
In such environments, APY may be adjusted downward for the following month to reflect prevailing market conditions.
Maker Core Strategies Snapshot
- March performance:
USDT: up to 10% APY, 0.8% monthly yield
BTC: up to 5% APY, 0.41% monthly yield
XRP: up to 5% APY, 0.41% monthly yield
BNB: up to 6% APY, 0.49% monthly yield
SOL: up to 7% APY, 0.56% monthly yield
TRX: up to 6% APY, 0.49% monthly yield
DOGE: up to 7% APY, 0.41% monthly yield
BCH: up to 5% APY, 0.41% monthly yield
LINK: up to 5% APY, 0.41% monthly yield
XLM: up to 8% APY, 0.41% monthly yield
DAI: up to 7% APY, 0.57% monthly yield
DOT: up to 5.5% APY, 0.41% monthly yield
ARB: up to 7% APY, 0.57% monthly yield
ZIL: up to 10% APY, 0.56% monthly yield - April APYs:
DOGE: up to 5% APY
DOT: up to 5% APY
XLM: up to 5% APY
ZIL: up to 7% APY - Risk profile: Low – Medium
March performance was consistent with the strategies' yield corridor under current market conditions.
When this strategy performs best
Maker Core strategies perform best in environments with strong trading volumes and meaningful price movements.
Higher activity increases execution opportunities and supports more consistent yield generation.
When performance may be lower
Performance tends to moderate during low-volume, low-volatility market phases.
When trading activity declines and price movements are limited, yield generation remains at baseline levels.
USDT DeFi Strategy Snapshot
- March performance: 10% APY, 0.79% monthly yield
- April APY: remains unchanged
- Risk profile: Medium
March performance was consistent with the strategy’s yield corridor under current market conditions.
When this strategy performs best
The USDT DeFi strategy performs best in environments with elevated trading activity and sustained volatility.
At the end of each month, APY may be adjusted upward for the following month if market conditions support stronger yield generation.
When performance may be lower
Performance may moderate during sharp squeeze events, where forced liquidations drive rapid price dislocations.
Under such conditions, capital allocation becomes more defensive, which may reduce short-term yield.
In these environments, APY may be adjusted downward to reflect the prevailing risk-reward balance.
ETH DeFi Strategy Snapshot
- March performance: up to 4.1% APY, 0.34% monthly yield
- April APY: remains unchanged
- Risk profile: Medium
March performance was consistent with the strategy’s yield corridor under current market conditions.
When this strategy performs best
The strategy tends to perform best during periods of volatility when GMX traders incorrectly predict market direction.
In volatile phases where traders take the wrong side of the move, the strategy generates yield from trader losses and trading fees.
Over time, these phases offset periods when traders are profitable and contribute to long-term performance.
When performance may be lower
Performance may be more moderate under the opposite conditions – when GMX traders correctly predict market direction during volatile moves.
In these periods, trader profits can outweigh fee income, which reduces overall yield until market conditions shift.
Perp Vault Strategies Snapshot
- March performance:
USDT ETH-based: -2.1% monthly yield
USDT BTC-based: -0.6% monthly yield
BTC: up to 22.1% APY, 1.84% monthly yield
ETH: up to 13.7% APY, 1.15% monthly yield
BNB: up to 32.8% APY, 2.73% monthly yield
SOL: up to 35.8% APY, 2.99% monthly yield
LINK: up to 26.8% APY, 2.23% monthly yield
AVAX: up to 7.4% APY, 0.62% monthly yield - April APYs:
USDT Perp Vault ETH-based: up to 20% APY - Risk profile: High
March produced a sharp divergence in Perp Vault outcomes — with strong positive returns across native-asset vaults and notable losses in the two USDT-denominated vaults (BTC-based and ETH-based). The key to understanding this split lies in the mechanics of how each vault is exposed to the underlying asset's price movements.
Top performers: SOL, BNB, LINK, BTC, ETH
The native-asset Perp Vaults delivered strong returns across the board. March's combination of elevated volatility, high trading volumes, and the geopolitical crisis created an environment where leveraged traders were frequently caught on the wrong side of sharp moves.
SOL led with +2.99% monthly yield, continuing its strong performance from February. The asset traded in a volatile range — dipping below $80 during the late-March sell-off but rebounding mid-month alongside broader market recovery. High perpetual trading volumes and a mix of aggressive long and short positioning generated significant fee income and counterparty profit for the vault.
BNB delivered the second-strongest return at +2.73%. The asset benefited from relatively balanced positioning and sustained trading activity, particularly around the Binance ecosystem. LINK (+2.23%) followed a similar pattern — high-beta altcoins with active derivatives markets saw the most aggressive positioning and the most frequent liquidations, which directly benefit the liquidity pool.
BTC (+1.84%) showed a meaningful improvement from February's flat result. While BTC's price movement was relatively contained (roughly flat for the month), the elevated volatility around the Iran crisis — with intraday swings of 3–5% on multiple occasions — generated strong fee income. The balanced mix of institutional buying (ETF inflows) and risk-off selling created a two-sided market that favored the vault.
ETH (+1.15%) posted a solid positive return, supported by the ETHB-driven rally mid-month and subsequent retracement. The directional chop — a rally to $2,300 followed by a decline back to $2,050 — generated fee income on both legs of the move.
AVAX (+0.62%) posted a modest positive result, an improvement from February's -0.36%. Trading volumes and positioning dynamics were less favorable compared to more liquid assets, but the overall environment was sufficient to generate baseline returns.
Underperformers: USDT ETH-based, USDT BTC-based
The two USDT-denominated Perp Vaults posted losses — in contrast to the positive results in the native-asset vaults. The distinction is structural.
USDT-based Perp Vaults are denominated in stablecoins but provide liquidity against the underlying asset (ETH or BTC). When the underlying asset's price rises — as ETH did during the ETHB-driven rally mid-month — the vault absorbs impermanent loss without the offsetting benefit of holding the appreciating asset. The vault pays out to profitable long traders while its USDT-denominated position does not benefit from the price increase.
The USDT ETH-based vault was hit hardest (-2.13%) because ETH experienced the most pronounced directional move of the month — a sharp rally from sub-$2,000 to above $2,300 after the ETHB launch, followed by a partial retracement. The sustained upward move favored long traders, whose profits were extracted from the liquidity pool. Fee income was insufficient to offset these counterparty payouts.
The USDT BTC-based vault posted a smaller loss (-0.67%), reflecting BTC's flatter trajectory. The losses were driven by brief but sharp upward moves that benefited leveraged longs, while the overall sideways price action limited the fee income needed to compensate.
This month illustrates a key structural difference: native-asset vaults benefit when the underlying asset recovers (their denominated value increases alongside counterparty and fee income), while USDT-based vaults face headwinds when the underlying asset moves sharply in one direction — particularly upward.
When this strategy performs best
Perp Vault strategies thrive in volatile, high-volume environments with balanced positioning – particularly when both longs and shorts are active and leveraged traders are frequently caught on the wrong side. Base asset price drops, liquidation cascades, and elevated open interest all increase both fee generation and counterparty profit for the vault. Two-directional chop with strong trading activity is the ideal scenario: the pool collects fees on every trade while trader losses accrue as additional yield.
When performance may be lower
Performance tends to be lower during sustained one-directional moves with low trading volume – especially when traders are predominantly correct in their positioning. In these conditions, impermanent loss accumulates as the pool continuously rebalances – especially when the price diverges significantly from the entry price in either direction – while profitable traders extract PnL from the pool. Extended grinding declines with a clear short bias are the least favorable environment: the pool absorbs impermanent loss gradually without the offsetting benefit of large liquidation events or balanced fee generation from both sides of the market.
Yield in a Downturn
March tested a different kind of conviction than February. Where February delivered a liquidation cascade and record fear, March introduced geopolitical uncertainty on a scale the crypto market had never faced — an active military conflict disrupting 20% of the world's energy supply.
Yet the outcome reinforced a consistent pattern: yield strategies continued to operate through the turbulence. Liquidity Providing, Maker Core, and DeFi strategies generated returns that were independent of whether Bitcoin went up, down, or sideways — because their return drivers are volume and volatility, not direction.
This is the structural advantage of a layered portfolio.
A single strategy exposed to a single risk factor will inevitably have months where it underperforms — as the USDT-based Perp Vaults demonstrated in March.
But a portfolio that combines low-risk fee-generating strategies with medium-risk DeFi exposure and selective high-risk positions ensures that capital is generating returns from multiple independent sources simultaneously.
The recommended allocation framework remains:
- Approximately 50% in low-risk strategies (Liquidity Providing, Maker Core)
- Up to 30% in medium-risk strategies (DeFi)
- Up to 20% in high-risk strategies (Perp Vault)
Each layer responds differently to market conditions, which is precisely why the structure works. In a month where geopolitical conflict, central bank uncertainty, and institutional capitulation converged, the low-risk and medium-risk layers delivered steady, predictable returns — while the high-risk layer produced a range of outcomes that reflected the specific dynamics of each asset.
Diversification should be driven by strategy design and risk balance — not by headline APY alone.