Astronaut Capital Quarterly Report Q3 2024
From the CEO
It’s been a really mixed quarter, so we are going to keep this short.
BTC was the lead performer over the period while most alts and ETH denominated Most portfolios got crushed. A mixture of market volatility, dampening ETF-related excitement and mass dispersion of liquidity meant that many altcoins underperformed for the period.
As we head into Q4 there is some excitement in the air. Aggressive rate cuts paired with a good chance of a Republican win means the future in crypto may be a lot brighter.
The portfolio, while still ETH heavy, has also been focused on some new defi positions and small exposure to memes. No private placements have been made and instead, we focus on liquid secondaries.
While we outperformed altcoins and the performance of ETH over the period, we underperformed a pure BTC portfolio. There will be no distributions this coming quarter.
Hoping to provide everyone with a more comprehensive update during the next quarter.
Until next time,
Matthew Dibb
CEO of Astronaut Capital
Macro Outlook
Are we in a Bull flag or perhaps something worse?
The extension of sideways trading continues to capture markets as it consolidates. This perhaps applies strongly to Bitcoin as it once again showed why it sits at the helm of the crypto markets. In contrast, ETH and Alts, continue to bleed as the former declined more than 30% due to ETH ETF outflows in late July.
Overall, BTC ended the quarter relatively unchanged at $63k, while ETH fell -25% to trade at $2.58k. On a brighter note, BTC’s range-bound movement strengthens the argument for a bull flag formation and the possibility of an upcoming super cycle.
On the ground, at the Token 2049 event in Sep, we have seen a fair share of maximalists that remain bullish. However, there was also a noticeable shift as people showed sluggish sentiments with the concept of a bull run in 2024 slowly fading away.
That said, Token 2049 may have provided a springboard for the markets to bounce back, similar to last year when the event coincided with a local bottom. Coupled with the Fed beginning to cut rates, there is a reason to believe we are in a better position as compared to last quarter going forward.
News and Developments
While some may argue that this quarter was less productive due to depressed price action in the markets, significant developments occurred across both the macro and micro landscape — The Federal Reserve implemented a surprise rate cut, and the supply of stablecoins saw notable inflows. Traditional market participants showed growing interest, with positive momentum from the launch of Trump’s new project, World Liberty Financial, and rising volumes in BTC and ETH ETFs.
Nevertheless, given the sluggish markets, liquidations soared as fear overshadowed the positive developments. ETH gas fell to the lowest in years as transactional volume dried up, while companies continue to downsize or exit the market completely.
Positive News
- The Fed cut rates by 50bps, first time in 4 years
- Stablecoin issuers now in the top 20 for owning US treasuries
- Microstrategy intend to purchase another $700m of Bitcoins
- Trump backed project World Liberty Financial launching in Sep
- Crypto firms account for more than half of $250m donations raised for US election candidates
- After 7 months, Binance has re-launched in India
Negative News
- Ethereum hits 2024 low this quarter with $272m in liquidations
- Telegram CEO Pavel Durov arrested in France
- Gas fees on Ethereum falls to the lowest levels in years, reflecting sluggish markets
- Jump capital exit rumours amidst liquidation of their crypto portfolio
Astronaut Holdings
Changes to Portfolio Holdings in this Quarter
Total Portfolio (Liquid Assets)
Illiquid Assets
Assets that have been entered into at early-stages are still to be considered illiquid or not viable to factor into performance measures.
Dividends
Distributions to token holders
There will be no dividend distributions for Q3 2024.
*For more clarity and dividend criteria, please refer to our Dividend Distribution Policy
Net Fund Figures
Dividend Distribution Figures
High Water Mark
Performance Fees (10%)
Astronaut Capital will not take any performance fees this quarter, as the FUM value did not exceed the prior high-water mark.
Astronaut Performance
Post Mortem
Q3 2024 In Review
Another quarter of success for Bitcoin as it proved to be a standout performer this quarter. In hindsight, one might argue that simply holding BTC would have been a more straightforward approach than engaging in more complex or thematic narratives. However, BTC tends to outperform during market slowdowns and at the first leg of a bull cycle. Rather than trying to time the market, Astro has positioned the portfolio in anticipation of that.
The team could not deny that markets have moved slower than expectations, but we took the opportunity to rotate into sectors that we have high conviction in. Specifically, we increased our position in PENDLE and acquired ONDO, a Real World Asset (RWA) DeFi token.
A surprising outperformer in our portfolio came from GameFi, with IMX showing positive gains. This sector is gradually heating up as more games are launched and getting partnerships with major traditional gaming platforms, driving adoption.
We discuss some of the metrics relating to the fund’s performance below.
Comparative Benchmarking
Fund Performance Since Inception
The fund has paid a cumulative dividend amount of $6.95m since inception. The audit indicates that Astronaut Capital’s overall fund performance with paid dividends is $7.52m, which is 241% higher as compared to the value when the fund was launched in October 2017.
Liquidation of Holdings
The team has trimmed our holdings in MATIC and FXS, as we rotate our positions into tokens with better outperformance potential.
Outlook for Q4 2024
As discussed above, there’s a historical trend that BTC tends to outperform in the early stages of the bull market. The launch of its ETF has only strengthened its store of value narrative amongst investors as an alternative asset for one’s portfolio.
With ongoing macro uncertainties still looming (wars, rising unemployment, soft / hard landings), attention is growing towards hedging strategies. For cryptocurrencies, Bitcoin seems to be the main recipient of capital inflows into cryptocurrencies, leaving ETH and Alts lagging behind.
The significant undervaluation of these coins versus BTC suggests a greater potential risk-reward in these tokens when the bull cycle takes flight. Furthermore, the continued strong correlation between BTC and ETH could imply additional capital overflow from BTC into the other sectors.
We maintain our position that ETH and its ecosystem would be a recipient of this influx of capital. Although the markets have been slow moving over the past 2 quarters, the team believe we are on the cusp of a tremendous bull cycle. Hence, we prefer to stay on course and ride out this bull flag formation.
Astronaut Capital: https://www.astronaut.capital/
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Disclaimer
The contents of this report and its attached documents have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in or downloaded from or through this website, consult your own investment advisor to consider whether it is appropriate having regard to your own objectives, financial situation and needs.
Taxation and Investment Disclaimer
Astronaut and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. We disclaim all liability and responsibility arising from any non-compliance placed on such materials by you or any other visitor to Astronaut or by anyone who may be informed of any of its contents. This is not investment advice.
