The formula is the same. The inputs aren’t.

Net asset value is still assets minus liabilities, divided across share classes by units in issue. What changes in crypto is almost every input to that formula. There is no market close. The same token trades at different prices on different venues. Assets sit on exchanges, with custodians and in on-chain wallets at the same time. And some positions earn yield continuously.

The fund’s valuation policy defines how each of these is handled. The administrator and the auditor will test the NAV against that policy, so the goal isn’t a clever method. It’s a documented one, applied the same way every period.

This article describes common practice, not accounting or legal advice. Agree your valuation policy with your administrator and auditor.

1. Choose a valuation point

Crypto trades around the clock, so the fund has to choose the moment it values the portfolio: a specific time in a specific time zone, such as midnight UTC or 4pm London. That valuation point belongs in the offering documents and valuation policy, and it should be applied every period without exception.

Hybrid funds have an extra decision. If traditional assets are priced at their exchange closes and crypto at a different time, the NAV combines prices from different moments. On a volatile day that difference is material. Either align the crypto valuation point with traditional pricing, or document exactly how the two are combined.

2. Set a pricing-source hierarchy

Because venues disagree on price, the fund needs a rule for which price counts. Fair value standards (IFRS 13 and ASC 820) point to the price in the asset’s principal market — the market with the greatest volume and activity for that asset that the fund can access — or, where there is none, the most advantageous market.

In practice, the valuation policy records three things for each asset:

  • A primary source — a named venue, or a reference rate or index.
  • A fallback — what to use if the primary source is unavailable at the valuation point.
  • A staleness rule — how old a price can be before it needs review.

Set the hierarchy per asset, not per fund. A large-cap token and a thinly traded one need different treatment.

3. Handle the awkward asset types

Stablecoins

Value them at their observable market price at the valuation point, not an assumed 1.00. The policy should say what happens if a stablecoin trades away from its peg.

Staked assets and rewards

Staked principal is valued like the underlying token, with any lock-up or unbonding period noted. Rewards need a clear policy on whether they are accrued as earned or recognised when received — practice varies, so agree it with the auditor up front.

DeFi positions

Liquidity-pool positions are usually valued through the underlying tokens the fund could claim at the valuation point. Lending positions carry principal plus accrued interest. Protocol risk is a separate question from valuation and belongs in the risk framework.

Derivatives

Perpetual futures are marked using a defined price — often the venue’s mark price, if that’s consistent with the policy — and funding payments must be booked as they accrue or settle. Options need either venue marks or a documented model.

Illiquid and delisted tokens

Don’t carry a last traded price indefinitely. Illiquid positions need a documented review, often by a valuation committee, with any adjustment recorded.

Airdrops and forks

The policy should say when newly received tokens are recognised, and how they’re valued before a reliable market price exists.

4. Prove the assets exist

Valuation assumes the fund knows exactly what it holds. For a crypto fund that means reconciling the internal book, at the valuation point, against every place assets sit: exchange balances (including sub-accounts) through their APIs, custodian statements, and wallet balances read directly on-chain. Breaks get resolved before the NAV is struck, not after.

This is where crypto funds most often fall short of institutional standard. Balances copied by hand into a spreadsheet may be right, but they leave no evidence trail for the administrator or auditor to follow.

5. Accrue fees and liabilities

Management fees, performance fees (with high-water marks, hurdles and crystallisation), trading fees, funding costs, borrowing costs and fund expenses all accrue as they would in a traditional fund. Crypto volatility makes performance-fee accruals swing more, and share classes with different fee terms or currencies each need their own calculation — which is why the NAV should be struck at share-class level, not only at fund level.

6. Strike, check, publish

For most funds, an independent administrator strikes the official NAV. The manager keeps its own book, strikes a shadow NAV on the same policy, and compares the two at share-class level before publication. Variances beyond tolerance are attributed to a cause — pricing source, timing, fee accrual — and resolved before investors see the number.

The goal isn’t a clever valuation method. It’s a documented one, applied the same way every day.

A checklist for your valuation policy

  • Valuation point and time zone, and how it lines up with traditional pricing
  • Pricing hierarchy per asset, with fallbacks and a staleness rule
  • Treatment of stablecoins, staking rewards, DeFi positions, derivatives, airdrops and forks
  • Procedure for illiquid or delisted tokens, and who approves adjustments
  • Reconciliation sources — exchanges, custodians, wallets — and when they run
  • Fee methodology per share class
  • Tolerance for variances against the administrator’s NAV, and the escalation route

Frequently asked questions

What time do crypto funds calculate NAV?

There is no market close, so each fund sets its own valuation point in its valuation policy — commonly a fixed time such as midnight UTC, or a time aligned with the fund’s traditional pricing. What matters is that the time is documented and applied consistently every period.

Which price should a crypto fund use for NAV?

The price set by the fund’s documented pricing hierarchy. Fair value standards point to the asset’s principal market — the market with the greatest volume and activity that the fund can access — with defined fallbacks when that source is unavailable or stale.

Should stablecoins be valued at 1.00?

Not automatically. A stablecoin should be valued at its observable market price at the valuation point, with a documented approach for periods when it trades away from its peg.

How often should a crypto fund strike NAV?

The official NAV follows the fund’s dealing frequency, often monthly or weekly. Many managers also run a daily shadow NAV internally, because crypto prices and positions move continuously and problems are cheaper to fix the day they appear.

Who calculates the NAV of a crypto fund?

For most funds, an independent fund administrator strikes the official NAV. The manager typically keeps its own book and a shadow NAV to check the administrator’s figures before publication.