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AA Digital: Performance Update September '23

Dear Alternative Investment Enthusiasts,

The crypto market had a slightly positive month in September with Bitcoin up 4.07% and the Bloomberg Galaxy Crypto Index up 1.77%. Current events seem to be slowly turning in crypto's favor. The SEC under Mr. Gensler continues to lose important court cases, hype around the Bitcoin spot ETF is brewing, and major institutions like BlackRock and Jefferies are touting Bitcoin's strengths.

The tokenization train is pushing forward with yet another group composed of JP Morgan, BlackRock and Barclays working to develop a blockchain-based trading platform. The web 3 gaming sector saw movement as Amazon collaborated with Immutable, a Layer 2 solution for NFTs and blockchain gaming, based on Ethereum. In the US, Ferrari will start accepting crypto payments for its cars, while Tesla confirmed it still holds its Bitcoin investment.

For September, we were up 2.49%. We have a total return outperformance of 14.19% (vs BGCI) and 1.71% (vs BTC) with a strongly reduced annualized volatility of 26.70% vs 68.21% (for BGCI) and 60.31% (for BTC). There was nothing notable about the portfolio's movement last month.

The world has also been engulfed in the FTX debacle, presumed to be one of the largest fraud cases in American history. Some of Sam Bankman-Fried's top lieutenants have pleaded guilty to fraud charges and testified against him, generally painting a picture of deception and silencing dissent. Furthermore, his parents, Stanford Law professors, were moved into the spotlight as they’re accused of also having enriched themselves, sponsored political campaigns as well as charities using customer funds. Meanwhile, the FTX bankruptcy recovery looks better by the day. For example, FTX's early investment in the AI startup Anthropic recently yielded a $2 billion investment from Google.

Marc Seidel, and your AltAlpha Strategies Team

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