Digital Wealth Insider Portfolio Update April ‘24

First and foremost, thank you for your continued partnership on this investment journey. Your support is invaluable to us.

Fund Performance

The fund's performance this month was +13.44% (net of fees). This reflects an annualized return of 145.26% since the fund launched in August 2023.

Market Update

This month, we observed a mostly flat market. Despite this broader market behavior, our anticipation of an altcoin rally remains robust, supported by our in-depth analysis from last month’s newsletter and recent technological advancements.

Technology Highlight: The Dencun Upgrade to Ethereum, a leading altcoin, was a significant technological advancement. This upgrade drastically reduced Layer 2 transaction fees from $2 to just cents per transaction.

Why This Matters: Reduced fees mean enhanced profitability of transactions and operations on these platforms. For investors, lower fees increase the utility of these networks, which should drive valuations throughout the ecosystem significantly higher.

Portfolio Highlights

The following projects are some standout performers:

• Realio Network ($RIO), part of our Real World Asset (RWA) portfolio, is up 172% this month. (see the educational section below for more info on RWA)

  • RIO is a technology ecosystem for institutional-grade digital assets and was likely buoyed by BlackRock’s announcement of a RWA liquid fund.

• ATOR Protocol ($ATOR), part of our DePIN ( Decentralized Infrastructure Network) portfolio is up 124% this month.

  • We took advantage of a 70% dip in ATOR’s price back in November by significantly increasing our position.

  • While retail assumed the project dead, our relationship with the team and the ecosystem gave us confidence that the recent pullback was temporary and prices would rebound as the product roadmap progressed.

As mentioned, we are heavily weighted towards altcoins and put positions to work to generate additional yield. There’s been much excitement around the EigenLayer restaking airdrop (restaking is explained in the February newsletter) and this specific event has created extremely attractive yield opportunities due to its innovative approach to token distribution and staking incentives. Expect more on those in future updates.

This month, the fund was allocated an airdrop worth ~$10,000 from the Wormhole Airdrop as a reward for various qualifying on-chain activities. As a reminder, all airdrop rewards go directly to our fund investors.

Fund Composition:

The fund currently has ~80 positions across 13 different blockchains. Our largest and smallest positions are ~20% and ~1% respectively.

Yield (interest awarded for various on-chain activities) is being generated from 40+ sources. Although managing this many positions is extremely time intensive, we feel this not only allows us to maximize returns but more importantly shields us from concentrated smart-contract and default risks.

~90% of all assets are secured via cold-storage, the industry’s highest standard for keeping assets safe.

The other 10% of fund assets are on Kraken, one of the oldest crypto exchanges based in San Fransisco and known for their robust security standards.

Please visit the NAV LP Portal for access to your Investor Statements.

Thoughts on the Market

Bitcoin is deflationary because every 3-4 years it distributes half as many tokens, this event is called the halving. The halving is embedded within the computer code and some very obvious patterns can be seen cycle after cycle.

Historically, Bitcoin, and subsequently altcoins, tend to dip before the halving. The savvy move, as many veterans will testify, is to 'buy the dip,' especially focusing on those lesser-known altcoins with smaller market caps. Reflecting on the previous cycles, those who loaded up on alts during pre-halving dips were often rewarded as many altcoins didn't revisit their lowest points post-halving.

Our last newsletter highlighted how undervalued altcoins appeared to be, and today, we stand by that assertion more firmly.

Take a glance at the images we've included—they illustrate a compelling narrative. Compared to their all-time highs (ATHs), many altcoins are currently on sale, at discounts even deeper than what we observed last month. This is the financial equivalent of your favorite store announcing a flash sale on items you've had your eyes on for ages.

Following the 2020 halving, several altcoins thrived, embarking on impressive growth sprees. This isn't mere coincidence. There's a pattern here that's hard to ignore, and with another halving on the horizon, coupled with April's historical flair for altcoin success, it's an exciting time to be in the market.

In summary, we're not just watching the market—we're actively preparing to navigate it with precision. The halving cycle is more than a pattern; it's a starting gun for the race towards altcoin prosperity, and we want you onboard.

Our thesis remains robust: Bitcoin is reliable, but the dynamic growth opportunities lie within altcoins. We believe that the upcoming halving cycle signals a strong potential for altcoins to pump. It's prudent to anticipate some dips, but remember, these are opportunities to get in on the action before the market roars to life.

Announcement / Update

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Additionally, there are links to social accounts at the bottom of the website where you can access our shorts.