Multi-Strategy Fund Performance
The Fund posted its second consecutive strong month in October, fueled by catalysts we highlighted in previous newsletters and manager commentaries. Global liquidity has been on an upswing, with interest rates experiencing their first cuts in nearly four years. ETFs recorded their highest inflows since March, further underscoring the growing investor confidence in the sector while at the same time, the supply squeeze in bitcoin has intensified. Notably, Solana led the way among altcoins, posting an impressive 18% gain, while ETH lagged behind with a modest 6% rise, continuing its year-long trend of underperformance. As we approach the upcoming election, we anticipate heightened market volatility. However, regardless of the electoral outcome, the strong macroeconomic tailwinds currently propelling the crypto market suggest a positive long-term outlook for the asset class as we look toward 2025.
| Multi-Strategy Fund | Bitcoin | |
| October Gross Performance | 8.0% | 10.7% |
Market Commentary
Bitcoin’s role as a hedge against monetary debasement and central bank mismanagement—rather than against all market or geopolitical disruptions—was made especially clear this October, underscoring the often-misunderstood nature of its “safe-haven” appeal.
At the start of October, bitcoin initially fell by 5% as geopolitical tensions spiked in the Middle East. This escalation unfolded over a weekend when traditional markets were closed, highlighting bitcoin’s unique ability to trade 24/7 and settle transactions instantly. This characteristic allowed it to serve as a highly liquid asset during a period when other markets were inaccessible. Bitcoin and the broader crypto market reacted first, dropping before any other asset class, but also demonstrated resilience by recovering more rapidly than traditional assets once markets reopened.
Our recent research delves into this dynamic: with global liquidity on the rise, bitcoin’s price gains this month were fueled by its inherent sensitivity to monetary supply shifts, given its fixed supply of 21 million and an independent monetary policy directly counter to fiat currencies. As global liquidity continued to expand, bitcoin responded by appreciating, reflecting a unique responsiveness among assets.
On October 25, another geopolitical shock—an Iranian-Israeli confrontation—briefly rattled the market, with bitcoin experiencing an initial decline as it again became a liquid asset of choice for investors caught off guard over the weekend. However, this decline was short-lived; bitcoin quickly rebounded, nearing all-time highs by month’s end. Such patterns illustrate bitcoin’s history of initial drawdowns during geopolitical events, often followed by swift recoveries, as noted in a recent BlackRock report. The report highlights multiple instances where bitcoin reacted faster than traditional markets, often recovering to prior levels within days or weeks, and at times outpacing other assets in its rebound.
It’s worth reiterating that bitcoin’s safe-haven status is often misinterpreted. A true safe-haven asset doesn’t mean it’s immune to short-term declines; rather, it’s expected to preserve or increase in value during times of monetary or economic stress. Bitcoin has demonstrated this in various crises, including the March 2023 regional banking crisis, the Canadian trucking protests, the Cyprus banking crisis, and periods of currency devaluation in countries like Argentina and Turkey. However, bitcoin can experience short-term volatility in reaction to geopolitical events or market dislocations.
In light of recent events, it’s beneficial to zoom out. Global liquidity trends remain upward, bitcoin adoption continues to grow, ETF inflows are rising, and supply remains capped at 21 million. While short-term fluctuations are inevitable, the long-term conditions for bitcoin’s price growth are firmly in place, positioning it to potentially set new all-time highs in the months to come.
The Blockforce Team
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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