End-of-Year Report

Hodl Team
Hodl Team
22 December 2023

What happened in 2023?

In 2023, institutional interest became the main story for the digital assets industry. The year started with a relatively sluggish start, witnessing Bitcoin recovering lost ground as it surged beyond the $20,000 mark. However, a setback occurred when the stablecoin USDC depegged due to a bank run at Silicon Valley Bank, resulting in incomplete backing for redemptions. As a result of the uncertainty, Bitcoin experienced a correction towards $18,000. Yet, with the news that USDC’s peg was restored, Bitcoin swiftly rebounded, reaching approximately $28,000.

Between April and mid-June, the market experienced a downward trend, seeing Bitcoin's price dip to $24,000. However, the narrative shifted when reports surfaced of BlackRock, the world's largest asset manager, seeking approval for a Bitcoin spot exchange-traded fund (ETF).

BlackRock’s interest in the industry caused many other asset managers to rethink their strategy and shortly after, the industry experienced an influx of Bitcoin spot ETF applications. As more asset managers joined, the narrative became ever stronger. Furthermore, a critical juncture occurred when a US court ruled in favor of Grayscale against the SEC, ruling that the SEC denied its spot ETF application on false ground. As a result, the SEC's main counterargument was ruled invalid and Bloomberg analysts currently foresee a 90% approval between the 5th and 10th of January 2024.

As chances grew of Bitcoin spot ETF approval, asset managers began to explore other digital asset investment vehicles. This led to the introduction of nine Ether futures-based ETFs and the application of two Ether spot ETFs. This acceleration of adoption resulted in a surge of market confidence and an upward trend for Bitcoin toward $44,000.

Performance Hodl Strategies

Reflecting on 2023, our Actively Managed and Algorithmic Trading strategies delivered positive results from December 2022 to December 2023, showing returns of 113% and 135%, respectively. The Algorithmic Trading strategy performed exceptionally well during this period, while the Actively Managed strategy fell short of Bitcoin's performance. This was largely due to Bitcoin attracting significant attention amidst the anticipation of ETF approval, leading to a shift in liquidity toward Bitcoin and causing altcoins to lag.

However, in the final quarter of 2023, we observed a resurgence in various altcoins, reclaiming lost ground. Looking ahead, although we anticipate Bitcoin maintaining a strong narrative in the first half of 2024, the latter half is expected to be marked by altcoins regaining their upward momentum and outperforming Bitcoin. This shift will favor the Actively Managed strategy as it diversifies its holdings across these assets.

Outlook 2024

We believe that 2024 will be the most important year for the digital assets industry to date. In our comprehensive report, we delve into the various interesting and exciting developments that the coming year will offer, including the imminent Bitcoin Halving. Download the report or schedule an appointment through the button below to discuss what digital assets can offer your portfolio.

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