Crypto Market Update – December 2022

January 2, 2023

Altfund Liquid Strategy performance was down more than BTC but less than Bloomberg Galaxy Crypto Index (BGCI)..  Key Takeaways from December 2022 per BofA Global Research: 

  • FTX’s bankruptcy is a major blow to industry credibility, but silver linings exist
  • Comprehensive regulatory frameworks are critical for mainstream adoption
  • Blockchain technology and digital assets aren’t going away Corporate engagement and tech development has accelerated YTD. 

I have received January preliminary numbers from our Fund Managers, and we have started out 2023 right and should be up around significantly for the month.  2022 has been coined another “crypto winter” which historically has started a new bull run or another “Bitcoin Halving Rally” that has happened 3 times before starting in 2011. The overall industry is in a better position going into 2024 “bitcoin halving year” than when we went into 2020! BofA Global Research: 

“The top 100 tokens are down -64% YTD, but the cost of ignoring digital assets is high with the top 100 tokens up 2,175% since 2016 YE.* There are 80 digital asset companies with valuations of $1bn+ and 41% of them reached unicorn status this year. Private investment reached ~$22bn YTD and is on pace to exceed 2021’s ~$26bn. At the same time, this is a nascent, but rapidly developing, industry that needs time to mature. Bitcoin is 14 years old, but dozens of blockchains and hundreds of applications have emerged, many of which are less than 3 years old. Our view is that we remain in the first innings of a major change in applications that will take place over the next 30 years.”

I believe we have seen the bottom and so do the funds we invest in. In my conversation with the managers, they have started personally allocating into their funds again, and I am doing the same, allocating into Altfund Liquid Strategy.  Here is my latest post with Dan Morehead from Pantera saying we have seen the bottom.

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