Date: 27th March 2023
Morning All,
Just a quick update on how the fund is doing.
While the Bitcoin price has been gradually increasing over the last 3 months, the value of the portfolio has of course increased.
However, this increase is tiny in comparison to our expectations.
We’ve slightly increased our allocation over the last two months and it now sits at 77.15% in Bitcoin and 22.85% in cash.
With the so called contagion in the banking system taking hold (banks around the world facing liquidity crises due to the legal but fraudulent fractional reserve deposit system they use), I feel that it may be approaching the moment Bitcoin was created for.
As the asset with no counter party risk, which cannot be inflated and does not require permission to use, I see that — unless the banking contagion is temporarily supressed — more and more large money managers will start to view it as the safest place for them to hold capital, which in turn will drive the value up when measured in fiat currency.
Of course, governments around the World will do everything they can to prevent a banking collapse because political parties are often financed by the banking industry, and government and central banks are essentially different arms of the same beast.
It does *look* like Bitcoin has probably bottomed at around $16,000 between November and January just gone.
That said, its still very early in the historical Bitcoin 4 year cycle, and I don’t rule out further downwards price action in the short term.
Also, the narrative amongst retail investors is very positive at the moment, with the majority of market participants being bullish in the short term. And as we know from experience, the majority is often wrong in the short term. So this is why we are still not 100% allocated.
As I’ve said before, if Bitcoin continues on its current trajectory upwards, I will look to de-risk by taking Investors principals off the table and returning to you. At that point, we should have our entire principal returned, but still have a good position in Bitcoin. But that wont happen until Bitcoin is at higher prices.
If you disagree with this risk mitigation strategy, please let me know your thoughts.
All the best,
Adam