Newsletter 5/20/21

Dear Investor / Partner / Friend,

Given the current extreme volatility/drawdown that the Crypto Market has experienced this week, the team at Block Asset Management thought it is important to write to our investors/partners/network to share our thoughts and those of industry experts, including some of our underlying fund managers. 

Before we do it’s worth noting that we await April NAV which we anticipate another double digit monthly return (for the 6^th month in a row), and despite the current, mid-month, retracement (ample time for growth before month end) our discussions with underlying fund managers lead us to believe that a positive return for May is still possible (many funds are deploying cash that was sat on the sidelines or from new subscriptions and buying the dip). 

For those of you that have been in this market since 2017 you will be aware that, even in a crypto bull market, retracements of 30% or more are not unusual as illustrated in the below chart:

Or for a more historical look at corrections and how the current pullback compares:

Such retracements can be caused by many factors but the simple fact is that after such incredible growth in the last 6 months (BTC rallied from $17k in December to $64k in April), a pullback was inevitable. On this occasion, many have pointed the finger of blame at Elon Musk and his reversal of support for BTC . If we throw into the equation the misleading and not technically correct news of China banning financial payment institutions from cryptocurrency business and we have the makings of an extreme overreaction from an inherently volatile market. 

We have read some great articles from educated sources that sum up the current market pull back/correction and we thought it prudent to share a few, hopefully they help put your mind at ease, one of the best responses has come from our friends at Arca (a fund Blockchain Strategies Funds invests in), read their update here

Brian Kelly of BKCM has this so say on CNBC news: https://www.cnbc.com/video/2021/05/19/bitcoin-has-to-get-over-what-elon-musk-has-to-say-to-become-global-currency-says-bkcms-kelly.html

Read the thoughts of Ark Invests Cathie Wood - Cathie Wood Says $BTC Going to $500,000, Still a Bitcoin Believer - Bloomberg

Goldman Sachs alum Raoul Pal’s expresses his thoughts here - Bitcoin at $250,000 in a year? This ‘rocket fuel’ will help it get there, says Goldman Sachs alum - MarketWatch

And the following articles should provide further comfort:

$83K Bitcoin price in the cards after data shows BTC whales bought the dip (cointelegraph.com)

Why Tesla’s Reversal Is Good for Bitcoin - CoinDesk

We see this as a normal retracement, albeit as usual, it occurred so quickly that we are not immune to such a drawdown. However, we and our underlying fund managers are not concerned and nor are we panic selling (typical of retail investors who have bought at the top). In fact we see this as a great time to invest, and with monthly inflows at hand we will deploying capital into the market in the coming days.

Investor Relations

Block Asset Management hain Strategies Fund March 2021 Factsheet

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Disclaimer

This publication provided by Block Asset Management Sàrl is published for information purposes only for the sole use of the intended recipient.This email does not constitute an offer of investment advisory services by Block Asset Management Sàrl nor does it constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. 

An investment in the fund is suitable only for qualified investors that fully understand the risks of such investment and only in jurisdictions in which such an offer is lawful. Interests in the Fund are speculative and involve a high degree of risk. You should be aware that you could lose all, or a substantial amount, of your investment in the Fund. Crypto-currencies can be extremely volatile and subject to rapid fluctuations in price, positively or negatively. Investment in one or more crypto-currencies may not be suitable for even a relatively experienced and affluent investor and independent financial advice should be sought where applicable. Block Asset Management Sàrl excludes its liability for any losses arising from the use of, or reliance on, information provided in this publication.