Volatile assets such as digital assets can produce above-average returns, but often expose the investor to deep and frequent drawdowns. It is important to have a disciplined system with cookie cutters and work within it and continue to adjust the portfolio if necessary as market conditions evolve.
Our exposure to the world of digital assets is through a highly diversified, regulated fund that features an independent administrator and a thoroughly audited track record. This structure ensures transparency, regulatory compliance, and a high level of security for our hard-earned wealth. This is not another Bitcoin fund!
Oh well, our digital assets exposure is like that one friend who skips the rollercoaster and opts for the merry-go-round, still in the game, but a whole lot less dizzying. While the market benchmark throws its hands up on the wildest rides, we are over here cruising at a calmer pace. Even with 2022 trying its best to throw a wrench in the works, we have been cruising along with over +300% gains since 2020.
This morning, a comprehensive commentary from my partner who is based in a different time zone on the state of the digital assets markets landed on my desk. When he speaks, it is always worth listening.
Here is a section:
Given the macro landscape, the changing political environment towards crypto, the success of the ETF launches, new players coming into the space, and what we believe to be real opportunities across the universe of altcoins, L1s, and other assets, we believe current market conditions present an opportunity to increase exposure.
We continue to remain overweight the large cap tokens and wait for the opportunity to increase our altcoin exposure As discussed previously, as the spot ETF catalysts play out, we intend to shift out of our substantial BTC and ETH position into altcoins, and this market correction is the opportunity we have been waiting for. We remain strategically positioned to take advantage of this in Q4 2024.
We believe that we are in the early phases of a new bull market cycle and expect altcoins to significantly outperform in the next phase of the cycle due to their more attractive risk reward profile with the backdrop of interest rate cuts later this year.
We reiterate our view from mid-2023 that this is the beginning of a multi-year secular bull market. This is not a cyclical bull market driven by changing interest rate expectations and sector rotation but rather a secular bull market.