July 2021 – Market Commentary

It was a tale of two months as prices continued to slide in the first few weeks of July before an end of month rally. While Bitcoin and Ethereum were up 19% and 11% (respectively), the results were mixed as about half of the assets that we trade finished down on the month.

A fascinating characteristic of this asset class is how quickly the tide can turn. In May, sentiment suggested the asset class was going to a $4 trillion dollar market cap and nothing could stand in the way (anyone remember $100k laser eyes?). Unfortunately, sell pressure from a mining crackdown in China and ESG concerns in the West seemingly broke the bulls back with sentiment doing a complete 180-turn by mid-July. One impressive short-squeeze later on the back of $110B in margin liquidations and here we are with a rapid swing in sentiment as Bitcoin hurdled back above $40k. Behavior such as this is par for the course in a nascent asset class where speculation is the prevailing use case.

The Nest Fund posted an estimated 3.9% gain (net of fees) for the month of July bringing the YTD return (net of fees) to 65.1%.