March Monthly Market Update

Welcome to our March monthly market update. In our market update, we provide a brief high-level wrap-up of what happened and what is interesting and new in the still-nascent digital asset markets. Our market updates supplement the quarterly Exponential Age Digital Asset Fund (“EADAF”) market commentary and monthly performance reports.

February in review

February was another volatile month for risk assets following Russia’s invasion of Ukraine. Cryptocurrencies ended the month in positive territory after a strong month-end rally: BTC up +14.5% and ETH up +6.9%. Although still in negative territory, BTC managed to outperform major equity indexes for the first two months of 2022: BTC -6.43%, DJI -6.70%, S&P500 -8.30%, Nasdaq Composite -12.10%. ETH remains -25.81% year to date (as of 28 February).

During adverse market conditions, we like to take a step back and remind ourselves of the big picture: the exponentially growing number of users that drive the adoption of blockchain technologies all over the world. Blockchain represents the fastest adoption of any technology in human history. More users bring more volume, which drives adoption and leads to higher prices, which in turn brings in more users. Considering that everyone benefits from the value of the network, this virtuous flywheel will keep turning until blockchain technology is the entire system of money, value, and contracts. Even assuming growth slows a bit (to the same rate of growth of internet adoption), we will see 1 billion users by early 2024 and over 5 billion users by 2030…

Notable digital asset news

• Canada implemented the Emergencies Act and froze hundreds of bank accounts (without a prior court order)
• Russian banks have been removed from the global SWIFT payment system
• Switzerland broke its 207-year-old neutrality

Even Switzerland is no longer neutral. At Expaam, we believe that current events will lead more citizens, countries, and corporations to hold (at least some) reserves in cryptocurrencies as the case for immutable finance continues to build. More are catching on, and adoption is increasing. We believe this adoption will only accelerate with ongoing regulatory progress.

• KPMG Canada adds Bitcoin, Ethereum to Corporate Balance Sheet
• Colorado to become first US state to accept cryptocurrency tax payments
• Ukraine raises more than US$54 in crypto donations
• The Marshall Islands officially recognize DAOs as legal entities

He called crypto “Jihad”… but now he’s changed his mind

Ken Griffin, CEO of investment firm Citadel (and 40th richest man in the world according to Bloomberg) says his call “was wrong.” Griffin is the latest billionaire investor to go from prominent crypto detractor to “yes” on crypto (following Ray Dalio, Paul Tudor Jones, Standley Druckenmiller to name a few). Citadel, one of the world’s largest hedge funds and market makers will “begin to engage with cryptocurrencies over the coming months.” Read the story here.

Even Buffet is backing “rat poison”… Only several months after 98-year-old Charlie Munger called crypto a “venereal disease” and claimed it is worthless and should be banned, Berkshire Hathaway declared in an SEC filing in February that the investment behemoth had bought US$1B of stock in a digital bank that focuses on cryptocurrencies. Read the story here.

Worth a look

Forbes Blockchain 50 2022

Blockchain demystified: “Cryptocurrencies hog the spotlight, but blockchain’s biggest innovations are below the surface, saving billions each year for the world’s largest companies.”

WELLS FARGO Special Report: Understanding Cryptocurrency

“Cryptocurrencies appear to be near a hyper-adoption phase, similar to that of the internet during the mid-to-late 1990s.”

Final notes

I will be in Melbourne and Sydney in early May. Please reach out to Travis Hamilton and let him know if you would like to meet with us.

Travis will be at the Australian Financial Review’s Crypto Summit 2022 on April 6th in Sydney. If you’re planning on attending - please reach out to Travis!