Digital Wealth Insider - Portfolio Update July ‘24

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

The dips are where the money is made….

Fund Performance

The fund's performance this past month was down -6.97% (after fees). The fund has a positive annualized return of +13.65% since the fund launched in August 2023.

Understanding Recent Turbulence and The Fear Mindset

We are experiencing volatility in a volatile asset class.

Broad market turmoil has acted as a drag on assets across the board. However, we see a few positive narratives building as we move into the later half of the year.

Japan's Rate Hike and Market Impact

Japan's recent interest rate hike has caused significant market turbulence:

1. Stock Market Reaction: Global markets, including the Nikkei 225, dropped sharply due to concerns over higher borrowing costs.

2. Currency Markets: The yen strengthened, impacting export-dependent economies by making Japanese goods more expensive abroad.

3. Bond Markets: Japanese government bond yields rose, leading to a global reassessment of bond prices.

Market Panic

Hysteria built over the weekend, with a possible middle east conflict, rumors of a large crypto shop liquidating positions, and recession fears adding fuel to the fire.

The Other Side of the Coin

We are still very bullish on crypto. There are many reasons, but in short, these are the main ones:

• ETH ETF Surge: On the first day of trading, ETH ETFs achieved $1 billion in volume, representing 25% of BTC ETFs' volume—a much stronger performance than most analysts anticipated. This is a bullish signal, suggesting growing institutional interest in Ethereum.

• FTX Creditor Payout: Approximately ~$16b in cash will be distributed to the FTX creditors in the next months - and many of them will likely deploy this capital back into the market. (This is part of the retail market coming back, we’ve talked about this in past newsletters)

• Market Reset: The recent stock market pullback has corrected many overinflated valuations, creating opportunities for future gains.

• Expected FED Rate Cuts: Later this year, the Federal Reserve is likely to cut interest rates, which could be a positive catalyst for the market.

• Pro-Crypto Political Support: The leading U.S. presidential candidate is pro-crypto, which could lead to favorable policies for the industry.

• Institutional Support: Major financial institutions, like BlackRock, are actively supporting and investing in crypto, signaling strong confidence in its future.

• Strong Job Market: Unemployment claims are trending downward and indicate a strong job market that can support economic growth.

What’s Next?

With the U.S. elections on the horizon, the potential for regulatory changes, and the upcoming FTX cash redemptions, Q4 seems to be shaping up to be a pivotal moment for crypto. The market setup is strong, and we anticipate that these developments could drive significant growth.

In summary, while the market has been rocky, the underlying fundamentals for crypto remain strong. We believe these temporary dips present an opportunity for long-term growth. Thank you for your trust in our strategy—we’re confident that our approach will continue to yield positive results as we navigate the road ahead together.

If you’re an accredited investor and you’d like to go review your current crypto portfolio and strategy click here to hop on a call with me to discuss. 

'Be fearful when others are greedy and greedy when others are fearful'
-Warren Buffet

Fund Composition

The fund currently has approximately 100 positions across 26 different blockchains.

Yield (interest awarded for various on-chain activities) is being generated from 39 unique protocols. Managing this breadth is time-intensive but crucial for mitigating risks and maximizing returns.

~85% of all assets are secured via cold storage, the industry’s highest standard for keeping assets safe. The other 15% of fund assets are on Kraken, known for its robust security standards.

Airdrops: Free Money

We are staking $JUP and got rewarded approx. $5,000 over the last month from actively participating in governance.

Talk soon,
Mike Klein
Digital Wealth Insider

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_{Disclaimer: The information in this newsletter is for general informational purposes only and is not financial or investment advice. All investments involve risk, including the loss of principal. Past performance is not indicative of future results. Consult with a professional before making any investment decisions. Digital Wealth Insider is not responsible for any losses or damages from the use of this information.}