Quarterly Crypto Market Review Highlights https://arxnovum.com/wp-content/uploads/2022/07/futureOutlook-scaled.jpg 2560 855 firstname.lastname@example.org https://secure.gravatar.com/avatar/e64531262a165eeb09ca7a2f7db5fec0?s=96&d=mm&r=g
The following are the key highlights and takeaways from our June 2022 Quarterly Crypto Markets Review letter to investors.
- LUNA, an algorithmic-driven pair that attempted to peg UST 1:1 with the US dollar, failed miserably impacting retail and institutional investors. We had no exposure to the LUNA/Terra/Anchor fiasco.
- The fallout from LUNA has us keeping a close eye on other stablecoins like USDT (“Tether”) and USDC (“Circle”) as neither are bankruptcy remote from a backing point of view.
- Furthermore, Silvergate Bank (SI-NYSE) and Signature Bank (SBNY-NASDAQ) are also on our mind for counterparty losses.
- Bitcoin has been through such periods before and appears to move in four year cycles related to the halving events where the supply of bitcoin created with each block is reduced by half.
- Bitcoin is perhaps best regarded as a technology with massive potential to address a fundamental human activity – value transfers – through network activity with extremely low costs outside of traditional channels.
- Bitcoin is and will remain highly volatile which reduces its use case as a store of value or a medium of exchange – both of which have faced a wall of anxiety by regulators and central bankers.
- As with any risky asset, the valuation of bitcoin is sensitive to rising rates and when the Fed’s hiking turns to cutting, we expect that bitcoin will rally accordingly.
- Staking of ETH2 is so far operating according to plan though with relatively low yields that are comparable to the yields available in Canadian bank or energy pipeline stocks.
- The primary issues that have prevented our involvement in staking are that the ETH2 is locked until the full merge of ETH into ETH2; that yield is paid out only when the merge happens and finally there are some issues around the custody of ETH2 that has given us pause.
- We did not invest in or with Celsius, BlockFi or any other yield farming platforms that we viewed as offering unsustainable and unsupportable yields.
If you are interested in receiving future Quarterly Crypto Markets Reviews please sign up at investor registration.
The products and services offered by Arxnovum are available to qualified investors in certain provinces and territories of Canada. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. All investments contain risk and may lose value. Investing in the cryptocurrency market is subject to risks. Cryptocurrency, often referred to as “virtual currency” or “digital currency”, operates as a decentralized, peer-to-peer financial exchange and value storage that is used like money. Cryptocurrency operates without the oversight of a central authority or the banks and is not backed by any government. Even indirectly, cryptocurrencies such as bitcoin may experience high volatility, and related investment vehicles may be affected by such volatility. Cryptocurrency is not legal tender. Federal, state, provincial, territorial or foreign governments may restrict the use and exchange of cryptocurrency, and regulation in North America is still developing. Cryptocurrency trading platforms may stop operating or permanently shut down due to fraud, technical glitches, hackers or malware, which could have an adverse impact on the net asset value per unit of the Fund. Please consult the Funds Term Sheet for a complete list of risks. Certain statements in this document are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “believe,” or “estimate,” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained herein are based upon what Arxnovum Investments Inc. and the portfolio manager believe to be reasonable assumptions, neither Arxnovum Investments Inc. nor the portfolio manager can assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.