August 2020 Market Commentary

The upward momentum in crypto markets that began in the latter half of July carried into the early part of August pushing both ETH and BTC to yearly highs. After touching 2020 highs (BTC $12,280 and ETH $438) mid-month, the market retraced yet still ended the month in positive territory with BTC +2.7% and ETH +25.5%. BTC’s recent gains have been dwarfed by that of ETH and the explosive growth in the DeFi space. ETH has seen a significant increase in trading volumes over the last few months and seems well-positioned to continue its overall upward trend.

Alternative cryptocurrency speculation is back in full force as excitement around Defi (decentralized finance) protocols swells. Price movements and volumes are reminiscent of the excitement and pandemonium experienced in early 2017 as traders and investors alike gamble on the next big thing. The narratives change but the game stays the same. One thesis we hold firm is that the cryptocurrency markets will continue to experience a series of speculative booms and busts. Consequently, our focus is on strategies that capture value from short-to-medium term market moves within the speculative mania that is clear and present.

– Nico Cordeiro, CIO