A price drawdown is not, in itself, a problem statement. The question is whether the income profile of held positions still justifies the duration risk.
Ether traded below $2,200 in the last week of February for the first time since November 2024. A brief survey of inbound client queries confirms what is usually the case in such moments — the questions are about what to do, when the prior question, the more useful one, is what is still working.
Three considerations frame our response.
A drawdown in spot price does not affect, on its own, the consensus rewards a staking position pays out. A client holding 100 ETH in stETH at $2,180 earns the same number of stETH per week as the same position at $3,400. The yield, expressed as a percentage of dollar value, is mechanically higher. This is the same inversion that fixed-income managers know well.
Allocations to USDC and DAI in our standard mandate are sized to provide non-correlated income through exactly the conditions of the past three weeks. The 14% to 18% of client portfolios in stablecoins has paid 4.8% on average year-to-date — a yield that compounds independent of ETH price.
ETH held in cold storage is not exposed to slashing, to protocol risk, or to liquidity stress at exchanges. It also does not earn anything. In drawdowns we receive the inverse question to the one received at peaks: why are we sitting on so much idle ETH? The answer is the same in both directions.
We are not making tactical changes to client positions because of February's price action. The decisions that matter — allocation discipline, jurisdictional structuring, custody design — are not adjusted in response to two weeks of drawdown. They are adjusted in response to changes in the underlying mandate, which have not occurred.
A separate matter that has come up in several conversations: clients asking whether the drawdown should be used to add to ETH spot. Our position is unchanged. We are not in the business of trading. Decisions to scale up exposure are evaluated on the basis of liquidity events, fiscal calendars, and family circumstances — never on the basis of a chart.