Digital Wealth Insider Weekly + Fund Performance in November

Author

Mike Klein
December 16, 2024

At Digital Wealth Insider, one of our core advantages lies in our unparalleled access to some of the brightest minds in the crypto space. These experts are exploring cutting-edge sectors and innovative use cases, enabling us to approach investments with both intention and opportunity. This strategic insight allows the fund to stay ahead of market trends, ensuring our decisions are informed, forward-thinking, and aligned with the evolving digital asset landscape.

Our mission
Share this edge with our readers, helping you stay informed and make smarter investment decisions.

In this edition:

Fund Performance Recap - Nov ’24

Fund Update: Key Highlights

November Performance Highlights:

  • Net Monthly Return: +60%

  • Gross Monthly Return: +60.07%

Annualized Returns (Since Launch in August 2023):

  • Net Annualized Return: +59.23% (after fees)

  • Gross Annualized Return: +83.75%

Overall Fund Performance:
For the month, the fund experienced a slight dip, finishing down -6.97% (after fees). Despite this, the fund continues to deliver strong long-term results, with a positive annualized return of +13.65% since its launch in August 2023.

Portfolio Overview

  • Diversified Across 25 Blockchains: Less than 1% of reviewed projects earn a position in our portfolio.
    Why this is good: Ensures we maintain a high-quality portfolio, focused on projects with strong fundamentals and growth potential.

  • Yield from 31 Protocols: Generating interest from a wide range of on-chain activities.
    Why this is good: Diversifying yield sources helps mitigate risks and maximize returns, though it requires significant management effort to execute effectively.

  • Security Leadership: ~84% of assets are secured via cold storage, and 16% are held on Kraken, known for its robust security measures.
    Why this is good: Cold storage provides industry-leading protection against cyber threats, while Kraken offers liquidity with trusted security.

Performance Spotlight: XRP and Cardano (ADA)

  • XRP: Achieved a 400% surge in November 2024, driven by Ripple’s legal victories and upcoming stablecoin launch.
    Why this is good: Validates our ability to identify underappreciated assets before key developments unlock their value.

  • ADA: Delivered over 200% gains, supported by whale accumulation and robust on-chain metrics.
    Why this is good: Demonstrates the importance of analyzing on-chain activity to identify strong ecosystems poised for growth.

  • Contrarian Success: Both assets were initially dismissed as “dead tokens,” but our disciplined, fundamentals-based approach uncovered their long-term potential.
    Why this is good: Highlights the value of research, patience, and conviction in a market prone to short-term sentiment swings.

Takeaway: These results reflect the benefits of a diversified, deeply researched, and risk-aware approach to blockchain investment. While managing such a broad portfolio is time-intensive, the returns speak to the effectiveness of our strategy.

DeFi in 2025: The Road Ahead

It’s dawn in DeFi and the sun is rising.

At The Fund, DeFi is a cornerstone of our investment thesis. We believe it represents the next great frontier in financial innovation. As 2025 approaches, here’s a succinct look at why we’re excited about DeFi, the challenges it faces, and the opportunities we see ahead.

Why DeFi Matters

  • Eliminating Barriers: DeFi enables financial transactions without intermediaries, removing friction, delays, and restrictive policies.

  • Tokenization of Assets: Innovations like fractional ownership of diamonds, U.S. Treasuries, and other real-world assets are making investing more accessible and efficient.

  • 24/7 Liquidity: DeFi provides seamless capital movement, enabling users to deploy wealth quickly and at minimal cost.

The Opportunities Ahead

  • Regulatory Clarity: 2025 is set to bring more defined rules, enabling projects to align token ownership with tangible benefits like revenue sharing.

  • Mature Ecosystem: Open-source development has strengthened DeFi systems, making them more robust and secure after early vulnerabilities.

  • Institutional Adoption: Financial institutions are starting to tokenize illiquid assets, setting the stage for a massive shift in how capital is managed.

The Risks to Watch

  • Black Swan Events: Hacks, vulnerabilities, and misconduct can derail projects. Diversification remains key to navigating these risks.

  • User Responsibility: Mistakes in DeFi—like sending funds to the wrong address—are irreversible, underscoring the need for user education and tools.

  • Scams and Fraud: While transparency reduces fraud, users must stay vigilant against scammers exploiting platforms like Discord and Telegram.

Why Transparency is Key

  • On-Chain Data: Users can verify treasuries, track transactions, and validate project health in real-time.

  • AI and Security Tools: Emerging tools will enhance safety by flagging suspicious activity and verifying wallet addresses, reducing risks for participants.

Sectors Poised for Disruption

  • Financial Services: Institutions like BlackRock and JPMorgan are already experimenting with tokenized assets. Expect a surge in adoption as regulatory clarity improves.

  • Real Estate: While slower to adopt, the potential for tokenization in this space is enormous, offering fractionalized property ownership and global access.

Looking Ahead

The Fund is exploring new ways to engage and educate our community. One initiative we’re considering is virtual jam sessions, offering a forum to troubleshoot issues, analyze projects, and strategize portfolio management.

DeFi is transforming the financial landscape, and we’re thrilled to have you with us on this journey. Let us know your thoughts or questions—we’re always here to discuss!

Michael Saylor and MicroStrategy: Is This Trade For You?

Michael Saylor and MicroStrategy: Insights for Crypto Enthusiasts

Who is Michael Saylor?

Michael Saylor, co-founder and executive chairman of MicroStrategy, is renowned for his bold Bitcoin-focused strategy. He has positioned MicroStrategy not just as a software company but as a significant holder of Bitcoin, using innovative financial maneuvers to expand its cryptocurrency reserves.

The MicroStrategy Playbook

  • Leveraging Bitcoin: MicroStrategy takes a leveraged position by borrowing funds and using them to purchase Bitcoin, a strategy some call financial engineering.

  • Market Impact: This approach has propelled MicroStrategy's stock price, at times outpacing Bitcoin ETFs, as investors view the company as a high-leverage bet on Bitcoin's success.

Key Debate: Strategy vs. Valuation

  • Proponents: Advocates laud Saylor’s vision of building a corporate balance sheet that grows in purchasing power rather than eroding under fiat currency inflation.

  • Critics: Detractors, including prominent hedge funds, argue that MicroStrategy’s valuation significantly overshoots its fundamental metrics, such as revenue or Bitcoin holdings, raising concerns about sustainability.

Should You Invest?

If you're considering MicroStrategy, here are some essential takeaways:

  • Not a Bitcoin Substitute: Unlike ETFs, owning MicroStrategy stock does not entitle shareholders to the underlying Bitcoin.

  • Thesis-Driven Decisions: MicroStrategy may be suitable if you believe in Saylor’s long-term strategy and the company’s future leverage of its Bitcoin holdings.

  • Risk of Leverage: Investing in leveraged positions, especially in volatile asset classes like Bitcoin, can amplify gains but also escalate risks.

The Bottom Line

For exposure to Bitcoin, direct investments or ETFs offer clearer and often less risky alternatives. MicroStrategy’s appeal lies in its unique approach and leadership under Michael Saylor, but it’s not without its complexities and potential pitfalls.

An Interview with Alex Mirran from Lilypad

About Alex Mirran and Lilypad

Role and Mission:

  • Alex Mirran leads Business Development at Lilypad, a platform turning idle computing power into a marketplace for AI and research applications.

  • Lilypad aims to make powerful computing accessible to everyone, mirroring how Airbnb transformed unused spaces into rentals.

Background:

  • Alex has a background in finance, computer science, and blockchain.

  • His interest in Bitcoin led him to the blockchain space, and eventually to Lilypad.

Key Topics Covered:

  • How individuals can earn passive income by contributing their hardware's idle computing power.

  • The importance of light speed in cloud computing infrastructure.

  • Challenges and opportunities in building platforms that can compete with big tech.

SEC Chair Nominee Paul Atkins: What It Means for Crypto

In a significant development for the crypto industry, Paul Atkins has been nominated as the next SEC Chairman. We sat down with Mike Klein, Managing Director of Digital Wealth Insider, to understand what this means for crypto investors and the broader market.

Key Takeaways:

  • Major shift from Gary Gensler's enforcement-heavy approach to a more crypto-friendly regulatory environment

  • Atkins brings direct crypto experience, having advised crypto companies and served on the Token Alliance in 2017

  • First potential crypto bull market with supportive US regulatory environment

What This Means for Investors:

  • More crypto projects likely to be classified as securities, but with clear compliance paths

  • Potential for increased alignment between token value and project revenue/profits

  • Better frameworks coming for dividend and revenue sharing structures

  • Enhanced protection for retail investors

Industry Impact:

  • Banks more likely to offer crypto custody services

  • Enterprises more confident to integrate blockchain technology

  • Family offices and institutions may increase crypto exposure

  • Reduced concern about potential US crypto ban

What Businesses Want:

  • Clear rulebook for compliance

  • Understanding of when tokens qualify as securities

  • Framework that protects investors while fostering innovation

In Closing:

  • First-ever crypto bull market with supportive political tailwinds, unlike previous cycles that faced regulatory resistance.

  • Historic turning point: Market momentum coinciding with friendly regulation creates unprecedented opportunity

  • Shift from hostile to supportive SEC stance likely to accelerate institutional adoption.

  • Key Balance: SEC must still protect investors while fostering blockchain innovation

For a more detailed analysis of how this regulatory shift might affect your crypto investment strategy, reach out to schedule a consultation.

Crypto Questions Answered: Insights from Art Basel

At Art Basel, I explored how crypto intersects with art, finance, and culture. Here’s a summary of the key themes and questions I addressed:

  • NFTs are still a major focus for artists and collectors, but they’re evolving. Beyond digital art, NFTs are now being used to tokenize real-world assets like diamonds and other unique items.

  • There’s a noticeable shift in the U.S. toward a more crypto-friendly regulatory environment. This change is reducing fears about bans and creating optimism about government support for blockchain innovation.

2. What are high-net-worth individuals asking about crypto?

  • Many are trying to understand the basics, often asking, “Is it too late to invest?” While Bitcoin remains a popular entry point, they’re curious about other projects and assets within the space.

  • Although most already have a crypto account (like Coinbase), they often see their holdings as experimental rather than a serious tool for building wealth.

3. Is tokenization gaining traction in real assets?

  • Tokenization is no longer a distant concept—it’s happening now. Billions of dollars in treasuries and private debt are already on the blockchain.

  • People are surprised to learn that major institutions like JP Morgan and BlackRock are actively testing and using blockchain for significant funds, signaling mainstream adoption.

4. How does the art world’s embrace of NFTs influence blockchain adoption?

  • The art world remains a key driver of blockchain adoption. Artists are drawn to the technology because it offers novel revenue streams, like recurring royalties, and simplifies the logistics of selling and displaying digital art.

  • Big brands, such as Nike, are also leveraging NFTs for limited-edition drops, using them to bridge the gap between luxury and technology.

5. Were there any unexpected opportunities or partnerships?

  • Events hosted by major crypto players like Solana and Magic Eden highlighted how Art Basel attracts innovators and wealth builders from diverse backgrounds. These events created unique opportunities for partnerships and collaboration.

Key Takeaway


Art Basel reinforced how crypto and blockchain are transitioning from experimental to essential. The convergence of art, finance, and regulation is driving momentum—and we’re just getting started.

Announcing Advisory Services

At Digital Wealth Insider, we empower wealth managers to navigate the complexities of the digital asset space, providing them with the tools, insights, and strategies they need to confidently serve their clients.

Services We Offer:

  • Educational Programs: Workshops and training tailored to wealth managers to demystify crypto and blockchain technology.

  • Strategic Portfolio Integration: Customized strategies to incorporate digital assets into client portfolios with a focus on safety and compliance.

  • Regulatory Guidance: Expert advice to ensure compliance with evolving crypto regulations.

  • Digital Asset Fund Access: Managed fund options designed for balanced exposure to the crypto market.

  • Ongoing Insights: Regular updates, thought leadership content, and market analysis to keep wealth managers informed.

To learn more about Advisory Services, schedule time to chat with me here. CALENDAR LINK.