Singularity Fund — Weekly report #1
Weekly report from May 31 to June 6
After successfully testing our strategy (we will present the results of the tests in another post), we began building the fund positions and have now a fund up and running. The asset allocation does not fully represent the final allocation strategy because we are investing in segment 3 (ICOs) and segment 2 (dynamic) progressively, identifying the right opportunities.
Net Asset Value and Performance of the fund
NAV on June 6 = $7.44
Performance from May 31 to June 6 = 21.13%
Fund Composition on June 6
As BTC (Bitcoin) continues to be the center of the attention and to capture the biggest part of the investments in crypto-assets (BTC market cap still represents more than 50% of the whole crypto market), we are progressively lowering BTC weight in the fund, and reallocating the profits realized to the other assets. We believe the risks associated to the holding of BTC are increasing a lot faster than its potential of growth and we are therefore expecting a possibly severe correction of BTC price. The cost per transaction and the time to get transactions confirmed are increasing dramatically on BTC blockchain, negatively impacting BTC use value as a mean of payment. If the debate regarding the BTC scalability is not solved rapidly, BTC will be priced only for its reserve of value and probably lose a significant market share to the profit of other technically superior cryptocurrency.
In parallel to our decrease of BTC weight, we are increasing the fund exposure to ETH (Ethereum). We see ETH gaining a lot of momentum, as it is becoming the choice of reference for most of the projects requiring the use of smart contracts. Because of this momentum, ETH becomes the core of an ecosystem of developers, tools, and more recently investments, which altogether increase the attractiveness of the system in a positive loop. ETH may become one of the pillars of the nascent crypto-economy.
BTC 37.98%
ETH 34.57%
XRP 13.16%
WAVES 7.34%
TKN 1.95%
LTC 1.90%
BCAP 1.70%
DASH 1.39%
Crowdsales — ICO (Initial Coin Offering)
At the end of April and in May, we participated in two ICOs: BCAP (Blockchain Capital) and TKN (TokenCard).
BlockChain Capital is the first VC fund to offer tokens as an investment vehicle. They reached their funding cap of $10M in less than 6 hours, and BCAP is already being traded at more than twice its emission value.
TokenCard is a startup allowing to spend any ERC20 crypto asset through a VISA debit card. Their funding cap of $12,5M was reached in less than half an hour. TKN is now being traded at par to its emission value. We are confident that once the MVP batch of cards is distributed, TKN will see a strong demand.
We also tried to participate to the BAT (Basic Attention Token) ICO, however our transaction was not executed due to the huge demand of the token. The funding cap of $35M was reached in 24secs!!! Lesson learned — we did some extensive research to ensure that our next transactions will have all the chances to be executed, even in such extreme circumstances.
Coming weeks
Segment 1 (core): We will continue our decrease on BTC exposure and execute frequent rebalancing to ensure we are taking profits and reinvest in undervalued crypto-assets.
Segment 2 (dynamic): We are still exploring this asset class and analyzing several tokens to determine the potential candidates.
Segment 3 (ICO): The two main ICOs to watch are BNT (Bancor) on June 12 (see here for the details) and Tezos at an undisclosed date (see here for more information regarding Tezos fundraising).
Tools: we will soon offer a simple tool to compute the NAV of the fund in real time. Follow us and we will keep you posted!
Telegram channel: https://t.me/SingularityFund
