Multi-Strategy Fund Performance
The Blockforce Multi-Strategy Fund nearly doubled bitcoin’s performance in the month of May. A big catalyst was ETH, which saw its price shoot up 27% this month on the back of the SEC’s surprise announcement to approve the Ethereum ETF. The news wasn’t just good for the base blockchain, many tokens in the Ethereum ecosystem such as AAVE (21%), LIDO (25%), and UNI (50%) also saw notable increases this month. Meanwhile, bitcoin continues to consolidate just shy of all time highs with ETF net flows turning positive after four weeks of net outflows and long-term investors beginning to re-accumulate coins for the first time since December 2023. Although prices have remained choppy and range-bound since March, the market seems to be poised to push above all time highs in the coming months.
| Multi-Strategy Fund | Bitcoin | |
| May Gross Performance | 20.0% | 11.2% |
| May Daily Volatility | 3.24% | 2.87% |
Market Commentary
In April, bitcoin and the crypto markets experienced the deepest correction since FTX blew up in November 2022. A month later, bitcoin quickly rebounded back towards its all time high, reaching $71k on May 20th. Though the 20% correction in April was significant, it’s worth highlighting that the market has seen notably shallower corrections this cycle compared to previous ones. This suggests a degree of resilience and reduction in downside volatility is developing in the market as institutional adoption increases.
May also showed us that bitcoin is currently experiencing some resistance around $71k. This resistance around all time highs is normal as investors often respond by taking profits as price approaches these levels. It typically takes a few attempts to truly break into new price discovery because it takes time to work through and absorb the supply from these sellers. The good news is that we are now seeing early signs of a new wave of demand. Whereas the ETFs saw four straight weeks of outflows between the end of April and beginning of May, over the last two weeks the ETFs have brought in over $1.2B in net inflows. This renewed demand after a period of healthy consolidation suggests prices might be poised to push above all time highs in the coming months.
More important than price, May marked a historical turning point in Washington DC’s engagement with the crypto industry. Oklahoma became the first state to pass a law protecting individuals’ right to self-custody digital assets. Martin Gruenberg, Chairman of the FDIC and a long-time crypto opponent who was instrumental in orchestrating Chokepoint 2.0 against the digital asset industry, was forced to resign after it became clear he presided over a culture of toxicity and sexual harassment. SAB 121 was repealed by both the House and the Senate with strong support from both sides of the aisle. The first ever crypto market structure bill, FIT 21, was passed in the House by an overwhelming bipartisan majority. The House also passed the CBDC Anti-Surveillance State Act which if it passes the Senate, would prevent the Federal Reserve from issuing a central bank digital currency (CBDC). And most surprising of all, the SEC did a complete one-eighty at the last minute and approved the Ethereum ETF to just about everyone’s surprise.
It’s worth taking a minute to highlight the massive political sea change the past two weeks represent. It’s not just the number of wins the crypto industry has had on the regulatory front, it’s that there has been a deliberate change in tone from the White House, Donald Trump, the House and the Senate with regards to their stance towards the crypto industry.
Crypto is becoming a meaningful political force and the tides have dramatically shifted in May. It’s very likely those at the highest ranks of the Democratic party have finally realized that Senator Warren’s stance on crypto is a losing one which has led to an entire change in messaging from the Democratic party. Though a number of Republicans have long supported the industry, for the first time Donald Trump is now giving speeches about bitcoin, building crypto in the U.S. and protecting self-custody. We are witnessing in real time both parties actively positioning themselves to compete for votes from digital asset holders. Come November, it’s possible both presidential candidates and both political parties will be doing their best to portray themselves as crypto friendly. We may very well look back at May as the most significant month in crypto regulatory history.
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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