Massive validation for the crypto ecosystem.

In recent days, two events delivered massive validation for the crypto ecosystem:

  1. Paul Tudor Jones, one of the most successful hedge fund managers with a net worth of over $5 billion, bought Bitcoin as a hedge against the inflation he sees coming from central bank money-printing. This narrative has already been very strongly vocalized in the crypto community, but now it has been validated by one of the top-tier traditional investors.
  2. J.P. Morgan, the largest bank in the world, has onboarded Coinbase and Gemini as their first crypto clients. This is a clear sign that the crypto industry is rapidly maturing. Many will also remember that Jamie Dimon, J.P. Morgan CEO, declared bitcoin a fraud in September 2017. This is probably the highest-profile crypto U-turn ever.

Worrisome correlation

On the other hand, one worrisome pattern has developed in recent weeks: the crypto market has become highly correlated to stock markets.

As seen in the Coin Metrics chart below, BTC-S&P 500 correlation has spiked to all-time record levels after the massive price dump on 12 March 2020. Developments in recent days signal that correlation is decreasing again, but this is one important metric to follow. We believe that stock markets will plunge much lower in the coming months, and if the crypto market can decouple from the stock market’s action, it would be huge!

BTC-SPX correlation

Solidum Capital investment strategies performance

April 2020 (returns in USD):
51.3% Solidum Actio Crypto Growth Strategy (monthly report)
23.6% Solidum Cautus Crypto Hedge Strategy (monthly report)

We are especially proud to report the performance of Solidum Actio in April – it recorded a substantially better performance compared to the market and ended the month with a 51.3% gain, whereas the market recorded a 39.8% gain during April.

Market overview

Contrary to March, April was an uneventful month with a steady appreciation of prices. The crypto market continued with the recovery, started in mid-March. In the first nine days of the month, the market gained 21.3%. This was followed by two weeks of consolidation and another leg up in the last week of the month. The market recorded a robust positive performance in April with a return of 39.8%.

Crypto market performance (2020-04)

The crypto market recouped half of the losses from the February/March correction by the end of April. Bitcoin fared better than altcoins as it recovered 69% of the lost value – compared to 49% value retrieved by altcoins. All top 25 assets by market cap recorded a positive performance in April; the top three performers were Tezos (+70%), Stellar (+66%), and Chainlink (+64%). Bitcoin dominance increased by 60 basis points and ended the month at 65.6%.

Top 25 assets by market cap performance (2020-04)
Our Crypto Strategies

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.

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