The September woes we’ve seen in recent years once again manifested as the market lurched from one large run-up and deep drawdown to the next on the back of 100% annualized volatility. Despite a late-month rally, Bitcoin traded down -7% with the rest of the majors down between -10% to -20% on the month.
There was no shortage of events to help fuel uncertainty from China banning the use of cryptocurrencies (again), Tether’s potential exposure to Chinese Commercial Paper, Fed tapering expectations, and a major network shutdown (Solana). These events drove elevated volatility with no directional bias – an unfavorable market environment for the type of systems run in the Nest Fund. Although September proved to be a difficult month of trading, our focus remains on delivering superior risk-adjusted returns by capturing outsized gains from the significant directional behavior in crypto market cycles.
The Nest Fund posted an estimated (10.9%) loss net of fees for the month of September bringing the YTD return (net of fees) to 82.6%.