August 2021 – Market Commentary

The momentum that began in late July extended into August as the crypto asset class again eclipsed $2 trillion in market capitalization (yet still below its peak of $2.4 trillion in mid-May). The month brought notable performance from layer-1 smart contract platforms with ETH up 35% and competitive computing platforms such as ADA 109%, DOT 79%, and SOL up a staggering 255%. Bitcoin was a laggard posting a 13% gain in August.

More and more speculators continue to cash in on the digitization of art and cultural items as the number of new NFT projects has exploded in recent months. Whether this development brings a mainstream use-case to the crypto universe or simply the latest bubble within an industry constantly chasing outsized gains is unclear. Our long-standing belief is that this space will continue to evolve with unexpected outcomes. What we do anticipate is another series of speculative booms and busts whether those are driven by non-fungible tokens, decentralized finance, or something else entirely. As always, the Nest Fund’s focus is on applying systematic strategies to extract uncorrelated gains with a superior risk-adjusted return over a full market cycle.

The Nest Fund posted an estimated 24.4% gain (net of fees) for the month of August bringing the YTD return (net of fees) to 104.6%.