This week, my portfolio narrowed its losses to 57% (or 24% unlevered), a far cry from our last update in late January when losses accrued to as much as negative 118%. This goes to show how volatile the space can be, and how important it is to have conviction in your strategy, lest you fall prey of the usual meme of “buy high, sell low”.
While Bitcoin was essentially flat for the week, the recovery in Bitcoin’s price from the first quarter low of $30,000 to this past two weeks’ level of around $45,000 has finally allowed other crypto projects to begin its own recovery.
For example, Solana, a new smart contract platform that has a strong base of active users and developers, as well as my third largest position by cost basis, rallied 27.7% in the past seven days to end the week at $137 or $44bn in market cap.
At the same time, Ethereum (my largest position) has also quietly sustained a strong rally in each of the past three weeks, ending the week at $3,522 - a 40% increase from where it ended the week on March 13 ($2,518).
While there is absolutely no guarantee that this recent recovery in Bitcoin and the broader crypto market’s price levels will usher in a sustained rally, the last three to four months has been a lesson in the value of conviction when you’ve done your homework, as well as the old adage that “the market can stay irrational longer than you can remain solvent”.
Looking forward, I continue to be cautious about the outlook for the broader crypto market.
While the last couple week’s rally has been a great relief for those of us who are a gazillion percent exposed to the market, I am also deeply aware that real, breathless rallies often begin only when we have final capitulation in the market.
While we’ve been through a lot of pain in the last few months, we have also not seen the typical volume of trades typified by mass capitulation of existing holders that washes out the final wave of sellers, which often sets the stage for the next exponential rally.
Good night, and good luck.
To view prior notes, please visit web3disruption.substack.com.