BlockBay Capital portfolio update August 2021

BlockBay Capital portfolio update August 2021

The BlockWealth portfolios achieved a positive return of around +30% in August.

The total cryptocurrency market capitalization at the end of August 2021 is $2,100 billion. A month and a half ago, this was $1,200 billion. The market has recovered rapidly and may be on track to break the all-time high of $2,500 billion.

At the beginning of August the upgrade Ethereum was done. One of the most important changes was that a little bit of Ether is ‘burned’ with every transaction. More usage of Ethereum means that more Ether will be ‘burned’. The first results are positive, in August around $600 million worth of Ether was ‘burned’ which partially led to an increase in Ethereum of +36%. The positive market sentiment was further reflected in higher prices for other cryptocurrencies. For example, the price of Cardano doubled. In addition, there were further positive outliers underlying the portfolio. The underlying yield differences also show that there are increasing differences between cryptocurrencies. Bitcoin’s position as the ‘digital gold’ holds for the time being, Ethereum is the blockchain platform whose intensive use is partly due to a first mover advantage. In the spectrum below, there are opportunities for cryptocurrencies with specific use cases and advantages compared to, for example, an Ethereum. Technological developments in the market are moving fast, in addition to DeFi (decentralized finance) and NFTs (digital art in the form of unique tokens), it may well be that blockchain will take steps in the game industry.

Macroeconomic conditions are still favorable for cryptocurrencies, central bank quantitative easing programs are still ongoing and interest rate hikes are not expected for the time being. In addition, the Cuban government has announced that it is investigating whether cryptocurrencies can be considered legal tender. The reason for this is strong economic sanctions introduced by the United States. The local currency has fallen sharply, in addition, the economic sanctions ensure that fewer US dollars (as an alternative) are available. There is further (pressure on) regulation from developed countries. For example, Binance trading place is under increasing pressure from regulators not to offer services that require a license. In response, the exchange tightened its internal procedures. There was also a major hack in August, where $600 million was stolen from the decentralized financial platform Poly Network. The case had a rather confusing outcome, the hacker refunded all funds after stating that it was just for fun. Critics expect that it was virtually impossible for the hacker to launder such a volume of crypto coins and that the crypto coins were therefore returned.