Just Say 'No' To Crypto....

TPP MARKET COMMENTARY:

At this point, we are grateful we said no to crypto.

We may well have crypto traders on our platform some time in the future, but that time hasn’t come yet.

The concept may be necessary, and there are lots of die hard crypto fans out there, but Ed Davies says?‘why take a risk on something you can’t value, when you can just as easily take a risk on something you can?’.

He admits that?‘it has become a huge asset class and is probably here to stay, BUT our clients trust us, and we haven’t reached the stage where we trust crypto, yet. We only allow traders that we would invest in with our own capital, so we made the decision not to just jump on the crypto band-wagon because they’re shouting louder than everyone else’.

'Lots of hedge funds have started crypto desks and most have lost huge amounts of money since doing so.?We’re always keen to offer our users the best strategies and the best opportunities; we have been approached by many crypto traders, but until it can prove that it is a stable investment, it just isn’t worth the risk for us’.

‘I’m sure we will offer active cryptocurrency trading at some point in the future, but that time hasn’t come quite yet, and this enormous drop has proven to us that we made the right call.’

Sequoia Capital wrote down the full value of its $214 million investment in FTX a couple of days ago, only weeks?after the hailing?the embattled cryptocurrency exchange’s founder as a “legend” with a “saviour complex.”

The VC firm put in about $214 million last year in FTX’s international and US businesses, Sequoia told its investors Wednesday. The write-down includes holdings of both FTX.com and FTX.us, said a spokeswoman for the firm.

“We are in the business of taking risk,” Sequoia wrote in a message to investors.

Some investments will surprise to the upside, and some will surprise to the downside.”

Sequoia is among several prominent backers that stand to lose big on their holdings of Sam Bankman-Fried’s FTX. Others include?BlackRock Inc.,?Tiger Global Management?and?SoftBank Group Corp.?

That’s a big reversal of fortune for the start-up investment powerhouse, which in September?called?Bankman-Fried a “legend” worth emulating. This week, Sequoia appended a line to that?public article?that clashed with its celebratory tone.

“Since this article was published, a liquidity crunch has created solvency risk for FTX and its future is uncertain,” the latest addition went. “FTX is exploring all opportunities to ensure its customers are able to recover their funds as quickly as possible.”

A smaller venture fund, Multicoin Capital, told investors Wednesday that about 10% of its assets under management were affected. “Unfortunately, we were not able to withdraw all of the Fund’s assets on FTX,” Multicoin wrote in a letter reviewed by Bloomberg.

A sudden loss of confidence in FTX.com among customers exposed deep problems with the cryptocurrency exchange. People rushed to withdraw money and sell off tokens associated with the company, causing a liquidity crunch. A rival,?Binance, agreed to buy FTX.com and then pulled out over concerns with FTX’s financial health.

Bankman-Fried held a call with investors Wednesday and said FTX.com?needed a cash infusion?or would have to file for bankruptcy. The US entity, FTX.us, stood at a distance from the crisis, but the Sequoia writedown indicates a lack of confidence in that asset, too.

Big returns do require heightened risk, that much is a given. But writing down an entire investment is every investors worst nightmare.

Over the last 12 months the biggest cryptocurrencies have performed as follows:

Bitcoin:?-73.05%

Ether:?-72.75%

Binance:?-52.76%

Ripple:?-67.21%

Cardano:?-82.35%

Big tech has seen some pretty nasty falls this year too.

Meta:?-65.87%

Tesla:?-46.20%

Netflix:?-58.18%

Peloton:?-80.29%

Snap Inc:?-79.86%

Much of this year has been a case of knowing what to avoid as much as knowing what to buy.?Big tech and crypto have borne the brunt of it this year but they were the biggest gainers in 2020 and 2021.

We wrote in November 2020 that the world was creating a US tech bubble and we have been proven right.

Bubbles always need a catalyst to make them burst and this one was rising interest rates.

It’s hard to tell what is next but our fingers are crossed for all those invested in big tech and crypto. It’s been a tough year so far, but some of these losses are just mind-blowing.

Our traders focus on the markets that everyone knows and can relate to. The majority of traders even avoid individual stocks and focus on the whole Index.?Whether it's the FTSE, CAC, DAX, Nasdaq or S&P (amongst others) there are always opportunities, regardless of the market climate.

The reason they avoid individual stocks in the main, is because it ensures?they avoid?an unexpected drama or event that turns a stock valuation on it's head.

Could anyone really have predicted the extent of the demise of Meta, Tesla, and Peleton this time last year?

Many of our competitors?on the?'trading platform' side?have focused on the crypto arena to increase their bottom line (at the expense of their clients).?It's painful to watch.

Many IFA's and Wealth Managers have dived into tech by filling their clients portfolio with FAANG stocks (Facebook, Amazon, Apple, Netflix and Google).

TPP won't follow fads or short term trends.

We'll only ever let traders with extensive track records showcase their strategies on our platform. It gives us confidence, and we hope it provides the same comfort for our clients.

If you are interested in building a portfolio that aims to yield 2-4 x market performance on a per annum basis, by utilising the elite trading strategies showcased on TPP- contact our team today.

Don't just hear about the investment revolution.

Join it.