The past week (3-10 December) reminded investors of the magnitude of crypto’s short-term volatility. In less than 12 hours on Saturday 3 December, Bitcoin (BTC) fell from $53k to $42k before rebounding to settle just below the $50k range. There are three main reasons suggested for why this crash occurred, and all of them point to this being temporary and the bull run continuing. As such, current prices make for an attractive entry point into the market.
The uncertainty caused by the Omicron variant has had detrimental effects on worldwide markets. Markets fell upon news of the new variant being found in the US, with the Dow Jones Industrial Average falling 2.5% by day’s end. This drove the de-risking of many investment portfolios and helped drive a decline in crypto prices. Secondly, in an attempt to curb rising inflation, the US Federal Reserve announced plans to aggressively taper its bond-buying program. Lastly, the combination of high leverage built up in the crypto markets in recent weeks and characteristically thin weekend liquidity exacerbated the situation. What could have been a much smaller crash was exacerbated by leveraged positions being liquidated in a self-perpetuating cycle with over $2 billion of long positions liquidated over last weekend.
The root cause of the flash crash can be summed up with one word: “uncertainty”. While the above reasons are cause for concern, none of them points to medium- to long-term risks that will affect the overall rise of the crypto market. As Warren Buffett once said: “Be fearful when others are greedy, and greedy when others are fearful.” Currently, there is more Bitcoin leaving exchanges than entering exchanges. This supply and demand mismatch is a possible indication of a supply crunch building and the spark for a resurgent bull run.
Market uncertainty and high volatility are inherent traits of the crypto market. The average investor does not have the time to thoroughly research and allocate capital to crypto. This is why Invictus Capital created a professionally managed crypto index fund, Crypto10 Hedged (C10).
C10 gives you exposure to the top 10 Cryptos by market cap and protects against market correction with a dynamic USD cash hedge. Over the past week, BTC’s price fell 11%, Ripple fell 18.5% and LTC fell a staggering 23%. In comparison, C10 Hedged was holding significant cash reserves, falling only 2% and quickly pivoting back into a crypto-dominated portfolio. By moving in and out of interest-bearing cash positions at opportune times, C10 aims to sell high and re-enter the market low, protecting the downside and boosting returns.
Invest in C10 today to gain passive exposure to the crypto market, with peace of mind that C10’s dynamic cash hedge has your back if the market falls. With a management fee of only 1.7% and a year-on-year return of 338%, C10 Hedged is the perfect index fund for new and seasoned investors looking for crypto market exposure without the headache of rebalancing their portfolio, trying to time the market, or cherry-picking specific crypto assets.
Prospective investors can create an Invictus account here, visit the website for more information, or schedule a call with a dedicated Fund Specialist. Alternatively, you can contact the Sales Desk directly at +1 (345) 769-7491 between 7:00 and 16:00 GMT.