New Year’s greetings! Let’s celebrate what a great 2019 it was for crypto … Don’t let the fake news convince you otherwise. 😉
Yes, prices rose and fell violently. Some people made money, and some lost. Timing was very important. But Bitcoin is higher today than this time last year by 90%. Despite the gains, Bitcoin continues to scare anyone looking to use it as a store of value… none of that is new.
What made it a great year for crypto was the explosive growth that cryptocurrency networks experienced in Asia, Europe, Africa and the United States.
The global Bitcoin network is growing in institutional circles at the fastest pace in its existence. The power of blockchain technology (and cryptocurrency, its first killer app) is catching on like wildfire all around the world.
With better regulator clarity, it shouldn’t be surprising that the pace of “crypto-normalization” is increasing. You can read our favorite highlights from 2019 below:
Growth is Booming in Asia
- China now has nearly completed digitizing its currency and has recently enacted laws supporting Blockchain Technology and educating its citizens as to its benefits.
- Japan’s largest bank, Mitsubishi bank offers cryptocurrency custody and trading services.
- South Korea and Singapore are courting Cryptocurrency firms as are Malta and Liechtenstein.
- “Blockchain” is the fastest growing job skill in Singapore, and among the top 3 in China, Japan, Taiwan, South Korea, Hong Kong and Vietnam, according to LinkedIn studies.
Growth is Booming in Europe
- Germany trades cryptocurrencies alongside equities on exchanges.
- In Switzerland and the UK, cryptocurrencies can now be banked for safekeeping with some of the country’s most iconic banks.
- France is attracting Cryptocurrency focused firms with preferential tax laws.
- The EU’s Financial Regulatory Authority FATF has issued clear anti-money laundering in the form of its “travel rule” which governs purchase and sale of “virtual assets” and requires reporting on crypto transactions greater than $1000.
Growth is Booming in the USA
- Over 100 Fortune 500 companies announced projects related to Blockchain Technology and/or Cryptocurrency.
- Futures and Options on Bitcoin and other cryptocurrencies have launched and have seen rapid growth.
- JP Morgan Successfully launched a digital Currency.
- Fidelity Investments now offers Bitcoin custody and trading.
- A new regulatory framework is in front of congress Read about it here.
Even More Growth with Regulatory Clarity
We now have SO MUCH more clarity into the trajectory of institutional crypto adoption. We are brimming with confidence that we are on the right path. We subscribe to the adage that markets will behave like voting machines in the short-term, but like weighing machines in the long-term.
We aren’t letting the short-term price of Bitcoin or any other asset cause us to turn a blind eye to the paradigm shift that is happening right in front of us. We foresaw many of the regulatory developments of 2019 and positioned our funds correctly (such as excluding “privacy coins” from our universe). Seeing the poor performance of the coins that we excluded has further validated our research and investment processes.
That is not to say it has been easy sledding. The MVIS CryptoCompare Digital Assets 10 Index, which tracks large cap cryptocurrencies (and to which we benchmark our flagship large-coin product Blockchain Momentum, LP), returned an underwhelming +9% for the year. The MVIS CryptoCompare Digital Assets 100 Small-Cap Index (the benchmark we use for our small-coin fund, Fifth Khagan, LP) fared even worse, ending down -33%.
We are happy to say that unlike our indices, both of our strategies remained positive for the year with net performance of around +45% and +15% respectively (unaudited and subject to change).
In 2019, our investment process added more than 25 percentage points of alpha on average verses our indexes. Our traders, analysts and “Blockchain Insider” group are delivering and deserve recognition.
Other firm highlights for the year included meeting with the IMF in Washington DC, improving the client experience with Daily NAV reporting and online account access and getting a chance to sit down with our favorite financial news anchor, Maria Bartiromo to share our ideas about how blockchain technology will rebuild the world’s financial infrastructure and what has caused the United States to fall behind China in the race to shape the future of finance.
In 2019 our team welcomed one new baby, heated a pool with Bitcoin Miners, opened an office in Massachusetts and enjoyed traveling around the country sharing best practices for safe cryptocurrency investing.
We will look back fondly on 2019 but are excited for what lies ahead for cryptocurrency and blockchain in 2020. The future looks bright!