Make-It Capital Edition #9
February 2021 | Make-it Capital Fund
THE WORLD AS WE SAW IT IN FEBRUARY 2021
1ST ANNIVERSARY EDITION
The world of cryptocurrencies
The month of February 2021 again witnessed big gains for bitcoin (+36%) and the general blockchain ecosphere. The market capitalization of the entire cryptocurrency market (M/C) gained 42% or roughly US$ 409 billion. That is more than the market capitalization of Walmart Inc. In one month!
Bitcoin dominance (BTC Dom.) fell 2% to about 60.5% of the total market. This is down from nearly 72% in early January. So who rose to prominence to bite into bitcoin’s cake? In 2020, we would have said, surely Ethereum (ETH). Not this time around as ETH “only” rose 8% comparing to BTC’s 36%. Other so-called altcoins such as Cardano (ADA), Polkadot (DOT) and Binance Coin (BNB), among others, were the culprits. We cannot go into the reasoning behind this significant development as we want to keep these commentaries as concise as possible. Suffice it to say, the Fund is or was invested in all three.
The dominant stable coin Tether (USDT) increased another 33% or US$ 8.5 billion. To put this into perspective, USDT added just in February 2021 its entire market capitalization as of May 2020, not even one year ago. Now that is explosive growth. Anyhow, there have been persistent doubts as to whether USDT really is 100% backed by fiat US$. For the time being, these suspicions have been soothed by a settlement amounting to US$ 18.5 million to end the New York attorney general’s 2.5 year probe into potential irregularities. So far, so good. We will be convinced once we see an official audit of USDT.
The world of commodities
Gold has continued its slump by loosing another 6% to US$ 1,728. As such gold touched a seven-month low while bitcoin rose to a new All-Time-High (ATH). This could signify a changing of the guards or just a tremendous buying opportunity for gold. Time will tell.
Energy prices in the form of oil (Brent) +18% and Natural Gas +8%, have been on a continued tear. Dr. Copper is hitting 9-year highs. In a normal world this indicates healthy demand equaling a burgeoning economy. However, what is normal these days? Reassuring to see though and congratulations to all copper longs.
Tech has under-performed. Are we witnessing a trend reversal? The volatility index (VIX) is down 16% for the month indicating smooth sailing. But was it really? The Nasdaq increased by nearly 8% until mid-month only to give up all gains later. Will the trend continue?
In view of increasing energy prices, might it be wise to switch to energy stocks? When looking at the aftermath of the dot.com bust in the early 2000s, one certainly might be inclined to think so, as energy related stocks as mirrored by the Energy Select Sector SPDR Fund (XLE) rose 400% in the pursuing six years. Certainly worth keeping an eye on.
Make-It Capital Fund
The Make-It Capital Fund (the Fund) is operated by Make-It Singapore and managed by Make-It New Zealand. It has been created to offer a unique one-stop shop for a comprehensive DLT / blockchain / cryptocurrency portfolio, empowering investors to participate in the entire spectrum with just one investment.
Apart from mirroring the entire asset class spectrum, the second and related objective is to preserve capital in a very volatile environment. This is achieved by employing our proprietary 5-pillar strategy reducing overall risk and volatility.
The Fund is open to institutional, accredited, and qualified investors. It always trades at exactly NAV.
We started the Make-It Capital Fund exactly one year ago. On February 21, 2020. Right before the huge C-infused crash of all markets during March 2020. What a baptism of fire that was! Well, in hindsight, it was great as it allowed us test our thesis early on and thus create proof-of-concept. The Fund now has returned 3.46x in our inaugural year, and we are immensely grateful for the exhilarating, at times exhausting, yet always educational experience. May we continue in this ever-learning spirit for decades to come. After all, we are still in the very first inning of the blockchain revolution. Which leads us to this:
Is it too late to invest? This is a question we hear a lot. And rightfully so. We do not have a crystal ball, however, we were asked the same question when bitcoin was at US$ 1,000 or US$ 10,000.
Big institutional traders seem to think it is absolutely the right time to get involved. When looking at bull call spreads at $75,000 and $100,000 strike call options expiring on May 28 via over-the-counter (OTC) trading and settlement desk Paradigm, one can see massive positions building up. Again adding some perspective, these traders will only make money when bitcoin reaches US$ 75,000 or higher in a few months. Someone is bullish.
In closing, we’d like to share another tidbit that caught our attention. Citigroup just published a 108-page report basically heralding bitcoin as the “Global Trade Facilitator” by becoming the currency of choice for international trade in a few years time. Pretty amazing. Should you like to delve deeper into it, here is the link:
As always, thank you for your time and attention.
Please stay safe, healthy and joyful.
Philipp von Gottberg
For more details on the Make-It Capital Fund, please contact: