Market Report #11

Abstraction Capital’s Market Updates provide insights into the crypto market and strategy performance. Please enjoy Market Update #11.

Cross-Asset Momentum Strategy

The strategy performed well since Fall, getting overwhelmingly long by mid-December. Having Dogecoin in the portfolio finally paid dividends. As one of the most liquid assets in all of crypto, its downside risk is limited even though it is a pure meme with no intrinsic value. The Elon-correlated DOGE pump may be over, but one last catalyst remains: an ETF.

Fetch has rebranded to Artificial Superintelligence Alliance, and although in my original paper I put FET in the portfolio understanding it is valueless, the problem is that the crypto-AI sector has exploded with respect to the number of projects. There are more legit projects to “bet” on the AI narrative, so change here is probably warranted. I will be running this strategy regardless, but a refreshed algo is in the works, with not only stronger asset selection but more importantly better risk management. A few of the worst days of performance are when a single asset shows idiosyncratic strength amongst incredibly poor market breadth, only for gravity to finally pull it—and the portfolio—down.

I am happy with the performance for now, and think that strong positive performance from ETH ETF flows—with a strong downstream impact on UNI, MKR, and OP, could bolster returns. And, of course, when the time is right, LINK will have it’s moment to shine.

	Strategy	Bitcoin
1 Week Performance	+6.99%	-8.47%
Performance since Market Report #1	+38.00%	+25.03%