BlockBay Capital portfolio update September 2021

BlockBay Capital portfolio update September 2021
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The BlockWealth portfolios achieved a negative return of -6% to -9% in September.

The cryptocurrency portfolio showed underlying large return differences between cryptocurrencies. For example, Solana achieved a positive return of +33% in September. Contrary, Cardano slowed down with a negative return of -22% in September. Despite the bad month, Cardano stands at an annual profit of +1.100%. The negative return in the portfolios are mainly caused by the negative returns of Bitcoin (-5%) and Ethereum (-11%).

The crypto market suffered from a lowered economic sentiment in September. The Chinese property developer Evergrande has found itself in financial difficulties, with its $300 billion debt burden causing problems with the company’s cash flow. The impact for foreign investors seems limited for the time being, although financial markets worldwide have taken a small step back after a good period. At the end of September, China (once again) announced strict measures against trading cryptocurrencies meaning that anyone working in the cryptocurrency industry can be prosecuted. The Markets reacted negatively, although Bitcoin’s damage was limited with a negative return of -4%. It seems that the impact of China on cryptocurrency markets is being decreased over time. However, it pays off to remain cautious with regards to Chiina. The roll-out of an own digital currency by the Chinese government could be accelerated as a result of a glooming financial crisis.

The fourth quarter of 2021 in cryptocurrency markets started well. The market was boosted by statements by Jerome Powell (chairman of the US SEC) who indicated that the US has no intention of banning cryptocurrencies. In addition, Twitter has made it possible to send small Bitcoin transactions to and from users via the Lightning network. In the fourth quarter, there also seems to be more clarity about a possible US Bitcoin ETF. Applications for such an ETF have been rejected by the American regulator in recent years. A new deadline for ETF proposals expires in November, boosting industry hopes for approval. A US Bitcoin ETF launch will make it easier for institutional investors to invest in Bitcoin.