Though the team’s crypto investing experience dates back to as early as 2014, Blockforce Capital was first established in 2016 and then opened to outside investors in March 2019. Over that time the fund has grown in size, the trading strategies have evolved, new assets have been added to the portfolio, and the fund has won numerous awards. However, the brand and messaging has remained the same. At the start of the year, the team endeavored to update the Blockforce brand to better reflect where the business stands today. This included refining the logo, redesigning our website, and updating our deck. While the brand refresh isn’t quite complete yet, the team is excited about the new look and we want to share a sneak peek with you all.
New Trading Algorithms
Towards the end of last year, we began noticing a new development in the structure of the crypto markets. As we have covered in past newsletters of The Node Ahead, the derivative markets started playing a much bigger role in the price action of cryptoassets during the later part of last year. This led to some large long liquidations in December and January and as well as a couple short squeezes more recently.
At Blockforce, we are always tinkering and looking to improve our models. Given this structural change in the market, we set out to better incorporate these signals into our trading strategies. Over the past few months we have been hard at work backtesting various parameters. In February of this year we put into production our new “Yosemite” series of algorithmic trading strategies to complement our existing “Zion” series of algorithms. (Fun fact, we have also implemented a new naming convention, based on the team’s love for national parks, to better categorize each of our systematic trading strategies). Much to our delight, the Yosemite ETH and Yosemite BTC strategies have performed very well since launching. We are currently experimenting with how the Yosemite series› performs with SOL, BNB and other coins.
March continued to build off some of the momentum the fund began to experience towards the end of February. The Multi-Strategy fund generated a return of 4.4% for the month, slightly below bitcoin’s 5.4%. However, the fund experienced only about a third of bitcoin’s average daily volatility. Thus, the fund continued to achieve its objective of capturing most of the upside while reducing the downside risk.
|March Daily Volatility||1.2%||3.2%|
As for the overall crypto markets, bitcoin (BTC) started the month at $43,200, dropped down to $37,300 in the early part of March before rebounding to finish the month above $45,500. Bitcoin has been range-bound since the start of the year as long term holders have stepped in to accumulate coins anytime the price dips below $40,000 thus creating a floor at around $34,000. Conversely, the average cost basis for those short term holders who bought towards the end of last year when bitcoin was on its way to new all time highs sits just under $47,000. Everytime we approach this level the sell pressure increases from those market participants looking to get their initial investment back thus creating an upper bound resistance. The result is bitcoin trading in a range bound for the last several months while long term holders accumulate coins, take them off exchanges and put them in cold storage. Similar to late 2020, we now have another supply squeeze forming which we believe will spark a large upward movement sometime later this year.
Though bitcoin continues to be range bound, some other assets in the Blockforce portfolio began to have break out months in March for the first time this year. Thanks to a strong run at the end of the month, Solana (SOL) finished up 23% in March. Terra (LUNA) continued its impressive run in 2022 up another 13% this month after hitting new all time highs and Aave (AAVE), the leading DeFi lending protocol, had a bounce back month climbing 42%. But the biggest winner in March was Thorchain (RUNE), the interoperability protocol, which climbed 186% in the month alone. This was the first time this year “alt coins” have outperformed bitcoin which is an exciting early signal that a larger bull market may be right around the corner.
The team at Blockforce is constantly researching new cryptoassets and exploring ways to improve our trading strategies in an effort to build upon the high bar we have set for ourselves. We remain laser focused on our long term goals but flexible in how to achieve them given how fast this industry continues to evolve. We are actively talking to new investors and would appreciate any introductions or referrals you may be willing to make. If you would like to increase your investment in Blockforce feel free to contact us at any time.
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. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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