Planting Coins: 10/24

Management Summary

• Contrary to expectations of seasonality, the KDAC strategy performed very positively in September.
• Performance was additionally boosted by the accumulated staking rewards.
• Bitcoins continue to be withdrawn and on-chain activity on Ethereum increases

What is the crypto investing series? 

This blog post is the tenth report in 2024 about the Kaleido Digital Asset Core (KDAC) Strategy. Read more about our crypto portfolio framework here. Don't forget to sign up to our newsletter to get the next reporting straight in your mailbox! 

"Rektember" contrary to expectations

September 2024 was an extremely interesting month in the crypto market. Historically, September has been the worst month for the performance of cryptocurrencies in terms of seasonality, which is why the month is often referred to in the scene as the “Rektember”. This was not the case in September 2024, when the equally weighted KDAC strategy closed well in the black.

Positive September contrary to expectations

From a macroeconomic perspective, September kicked off the interest rate turnaround from the Fed's point of view. The interest rate cut in combination with Powell's statement of a strong economy gave the markets a positive boost. At the same time, however, the interest rate level is still high despite the cut, which does not appear to be providing an immediate liquidity boost.

In terms of the diversified portfolio, Avalanche (AVAX) and Near (NEAR) were the best performers. In general, all holdings continue to move more or less in lockstep and no rebalancing was triggered.

The positive market environment in September once again showed impressively how performance is boosted by the staking rewards accumulated in the meantime, with the proportion of staking returns again breaking through the 20% mark

Accumulated staking rewards support the portfolio

For its part, the Fear & Greed Index continued to oscillate sideways and ended September in neutral territory at 56 points.

Fear & Greed Index continuously volatile

The gradual withdrawal of bitcoins from central exchanges remains constant. In contrast to the previous month, stocks have shrunk from 2.6 million bitcoins to 2.5 million.

The Bitcoin outflow curve continues its trend

We continue to see a similar, albeit not quite as strong, trend for Ethereum. On the other hand, we saw increased use of the blockchain again last month, which can be seen in the rise in gas fees that have to be paid for a transaction on the blockchain.

Less clear trend for Ethereum, but more activity

We remain cautiously optimistic about the outlook. After a weak six months since Bitcoin's peak, the market seems to be slowly but surely reaching a turning point. In addition to the aforementioned increase in on-chain activity, we are also observing macroeconomic factors like the start of the interest rate turnaround by the FED and its simultaneous statements about a strong economy. In terms of market breadth, we seem to be at the very beginning of a new uptrend. Let's see if "Uptober", in contrary to "Rektember" lives up to its reputation and the markets will rise.

Disclaimer: This piece of information is for marketing and entertainment purposes only and should not be taken as an investment recommendation. Remember that all investments involve risk. Please read our full Marketing Disclaimer here.