Funds Reports
Global Crypto Fund: December 2024 Report
Happy New Year!
“I certainly view volatility as my friend. Volatility is on sale because 99% of the institutions out there are doing their best to avoid it.” Michael Burry
In December 3CC Global Crypto Fund returned -2,14%. Nothing to worry about after the 63.3% sequential gain from October to November. More annoying was the underperformance to CF Ultra Cap 5, which lost only -0.8%, with the persistent outperformance of XRP (+15.79% in December), our largest active risk (-5.09%). Fortunately, we hold AAVE which delivered +58% on the month, although not entirely compensating the damage caused by XRP.
The month of December was relatively flat for the overall digital assets market, with Bitcoin gaining 0.29% and Ethereum and Solana losing -5.54% and -16%, respectively. But the volatility was there. Bitcoin lost 15% from its all-time high of $108, with the decline materializing after the more hawkish stance of the Federal Reserve (Fed) revealed on December 18th. With no surprise, the Fed is worried about inflation and so are we. What would be the impact of policies like slashing red tape, relaxing taxation, increasing tariffs and imposing restrictions on immigration? We should give reasonable doubt to the Fed on this one. Simply put, when real rates are on an upward trajectory and risk assets can't go up. S&P500 lost 2.5% in December.
Investment is all about probabilities. What are the probabilities of an exceptional equity market for 2025 when we had the best two consecutive years for the S&P500 since 1998; high yield and investment grade spreads close to historical lows, inflation persistence and long yields on the rise? Almost everything is possible on the markets since we are experiencing a big revolution with AI, and the AI convergence with Blockchain, the perfect environment for AI Agents, promises to be one of the next big things. But, we would not bet big on a double digit market for equities, not in the US and certainly not in Europe, where the economic engines are mostly selling luxury bags and cars with old fashion diesel internal combustion engines.
Yet, on average, Wall Street market strategist target 6.700 for S&P500, at the end of the year, a 13% expected return. Not bad, but also not very different from the last 20 years forecasts. If this scenario reveals correct, then Crypto Assets should return at least 3X the return of equities, upheld by Bitcoin expanding its role as a global financial asset, with potential adoption as a sovereign reserve and a corporate treasury asset, more friendly politics and regulation, and a wave of real word asset tokenization, led by stablecoins which should became a mainstream form of payment for cross-border remittances. With so many tailwinds on the make, even if equity markets experience a negative year, I still see a good chance of Bitcoin over performing S&P500.
In all this probabilities game, would you pay $3 for the opportunity to roll a dice and get $1 per dot?
Absolute imperative readings for the month:
Month Report GCF - December 2024
“I certainly view volatility as my friend. Volatility is on sale because 99% of the institutions out there are doing their best to avoid it.” Michael Burry
In December 3CC Global Crypto Fund returned -2,14%. Nothing to worry about after the 63.3% sequential gain from October to November. More annoying was the underperformance to CF Ultra Cap 5, which lost only -0.8%, with the persistent outperformance of XRP (+15.79% in December), our largest active risk (-5.09%). Fortunately, we hold AAVE which delivered +58% on the month, although not entirely compensating the damage caused by XRP.
The month of December was relatively flat for the overall digital assets market, with Bitcoin gaining 0.29% and Ethereum and Solana losing -5.54% and -16%, respectively. But the volatility was there. Bitcoin lost 15% from its all-time high of $108, with the decline materializing after the more hawkish stance of the Federal Reserve (Fed) revealed on December 18th. With no surprise, the Fed is worried about inflation and so are we. What would be the impact of policies like slashing red tape, relaxing taxation, increasing tariffs and imposing restrictions on immigration? We should give reasonable doubt to the Fed on this one. Simply put, when real rates are on an upward trajectory and risk assets can't go up. S&P500 lost 2.5% in December.
Investment is all about probabilities. What are the probabilities of an exceptional equity market for 2025 when we had the best two consecutive years for the S&P500 since 1998; high yield and investment grade spreads close to historical lows, inflation persistence and long yields on the rise? Almost everything is possible on the markets since we are experiencing a big revolution with AI, and the AI convergence with Blockchain, the perfect environment for AI Agents, promises to be one of the next big things. But, we would not bet big on a double digit market for equities, not in the US and certainly not in Europe, where the economic engines are mostly selling luxury bags and cars with old fashion diesel internal combustion engines.
Yet, on average, Wall Street market strategist target 6.700 for S&P500, at the end of the year, a 13% expected return. Not bad, but also not very different from the last 20 years forecasts. If this scenario reveals correct, then Crypto Assets should return at least 3X the return of equities, upheld by Bitcoin expanding its role as a global financial asset, with potential adoption as a sovereign reserve and a corporate treasury asset, more friendly politics and regulation, and a wave of real word asset tokenization, led by stablecoins which should became a mainstream form of payment for cross-border remittances. With so many tailwinds on the make, even if equity markets experience a negative year, I still see a good chance of Bitcoin over performing S&P500.
In all this probabilities game, would you pay $3 for the opportunity to roll a dice and get $1 per dot?
Absolute imperative readings for the month:
- Europe's Economic Apocalypse is Now by Politico
- How to invest if you want to be cheerful by The Economist Money Talks podcast
Month Report GCF - December 2024
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Nuno Serafim
Managing Partner
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Nuno is an experienced financial executive with broad experience in the Asset Management industry, being board member of IMGA, where he served as Chief investment Officer, overseeing €3.4B of AuM before he founded 3 Comma Capital, together with Robert and Patrick Hable in 2022.
