Monthly Manager Commentary: November 2024

Multi-Strategy Fund Performance

Driven by increasing optimism about the likely favorable regulatory environment under the incoming administration, the Multi-Strategy Fund achieved one of its strongest monthly performances in November. The Fund delivered an impressive 43% gain, significantly outperforming bitcoin, driven by exceptional returns from smaller-cap assets such as Ethena (+133%) and Sui (+70%). With a market backdrop defined by regulatory clarity, growing adoption, and positive network trends, the Fund is positioned to capitalize on sustained bullish momentum. While short-term volatility remains a consideration, we view the next 12 months as a period of exceptional opportunity for the Fund, supported by its strategic allocation and disciplined approach.

	Multi-Strategy Fund	Bitcoin
November Gross Performance	42.7%	37.3%

Market Commentary

November was a landmark month for the crypto market, as bitcoin’s price finally broke out of its multi-month consolidation phase. The move was spurred by a combination of favorable regulatory sentiment following the U.S. election and growing market optimism. Bitcoin shattered its previous all-time high of $71,600 set in March, skyrocketing to a peak of $99,600. This surge coincided with the announcement that SEC Chair Gary Gensler will step down in January, adding further tailwinds to a market increasingly optimistic about crypto-friendly regulatory shifts.

Breaking into new all-time highs puts bitcoin in uncharted territory, often leading to heightened volatility as the market enters a price discovery phase. November was no exception, with bitcoin experiencing a 37% monthly gain. However, as bitcoin neared the $100,000 milestone, resistance emerged, with profit-taking from some investors leading to a pullback. The price dipped to $91,000 before recovering to $97,000 by the month’s end.

Periods like these warrant a deeper dive into market behavior to determine whether we are witnessing the peak of a speculative frenzy or the early innings of a prolonged bull market.

A critical tool in understanding market cycles is the distinction between short-term and long-term holders. “Long-term holders” are typically classified as those who have held their bitcoin for at least 155 days—a key threshold given historical patterns of dormancy and trading activity. Recent data revealed that most of the selling during November’s dip came from this cohort.

According to James Check, a leading on-chain analyst, “Long-Term Holders have distributed $60 billion worth of supply in the last 30 days. Of all the long-term supply moved since the FTX bottom, 21% of it occurred in November. This is the heaviest profit-taking we’ve seen this cycle.” While such profit-taking might typically signal a market top, further analysis suggests a more nuanced interpretation.

Coin Days Destroyed, an on-chain metric measuring the impact of long-held coins on market activity, paints a more bullish picture. Despite the significant volume of coins sold, CDD levels remain low. This indicates that the majority of coins sold were not from extremely old, dormant wallets but from relatively recent long-term holders.

Notably, the 155-day mark corresponds with bitcoin’s prior all-time high in March. This suggests that much of the selling came from investors who bought in during the $56,000-$71,000 range and are now realizing gains. Meanwhile, older, steadfast holders—those who acquired bitcoin at much lower prices—remain reluctant to sell.

Second, institutional demand has emerged as a stabilizing force in the market. For years, regulatory uncertainty has been the primary barrier to institutional participation in crypto. With a new administration in place, and a Republican-controlled House and Senate promising a more favorable regulatory framework, these concerns have eased significantly.

Evidence of this shift can be seen in the performance of Bitcoin ETFs. November marked the strongest month of inflows for U.S. spot Bitcoin ETFs, which absorbed 90% of the selling pressure. Institutional buyers are effectively creating a price floor around $90,000, signaling confidence in bitcoin’s long-term trajectory.

Beyond the technicals, the broader market backdrop remains highly favorable. Institutional, corporate, and even nation-state adoption continues to accelerate, with increasing integration of bitcoin into global financial systems. Meanwhile, the prospect of clearer, more supportive regulation under the new U.S. administration enhances bitcoin’s appeal as a legitimate asset class.

Network fundamentals also remain robust. Bitcoin’s hash rate—an indicator of network security and miner confidence—hit new highs in November, reflecting the continued strength of the underlying infrastructure.

The current market structure, combined with regulatory clarity, growing adoption, and favorable network data, suggests that bitcoin’s bull market is far from over. While short-term volatility is inevitable, the medium- to long-term outlook appears exceptionally strong. We view this as one of the most bullish setups in the Fund’s history, with significant potential for upside over the next 12-24 months.

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. 

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