Market Analysis Report (24 Jan 2022)

El Salvador purchased 410 Bitcoin for $15 million, according to a tweet from the country’s president Nayib Bukele, who said “some guys are selling really cheap,” referring to BTC hitting a six-month low after an abrupt sell-off.

Rising competition amid decentralized exchanges has seen some trading platforms move to slash their trading fees. Uniswap, the leading decentralized exchange, launched with a 30 basis point fee for all trades. However, with the introduction of Uniswap  v3 liquidity providers will be able to open pools with fees as low as 0.05%.

Comment letters released by the U.S. Securities and Exchange Commission (SEC) reveal Nasdaq-listed business intelligence firm MicroStrategy won’t be able to remove swings in the value of its bitcoin holdings from its unofficial accounting measures.

Invictus suite of funds offered commendable performance in a quarter marked by heightened volatility in the Bitcoin and broader cryptoasset market. All five of the Invictus funds registered positive returns for the quarter, with the vast majority outperforming their benchmarks. 

Top stories in the Crypto Roundup today:

• El Salvador Invests $15 Million in Bitcoin During Market Dip
• Decentralized Exchanges Slash Trading Fees
• SEC Rejects MicroStrategy’s Bitcoin Accounting Adjustment
• Chart of the Week: Likelihood of Lone Miner Winning Bitcoin Block Reward
• Sponsored: Invictus Capital continues to deliver an uninterrupted path of growth across all its funds

Salvador Invests $15 Million in Bitcoin During Market Dip

El Salvador purchased 410 Bitcoin for $15 million, according to a tweet from the country’s president Nayib Bukele, who said “some guys are selling really cheap,” referring to BTC hitting a six-month low after an abrupt sell-off.

The price of Bitcoin dropped from around $43,000 late last week to a low just above $34,000 before recovering slightly. Amid the sell-off, Bukele fired off his tweet implying he had not missed the price dip.

Most of what’s known about El Salvador’s Bitcoin purchases comes from Bukele’s tweets, where he mentions the country “bought the dip.” Buying the dip refers to buying an asset at a “discount” when its value decreases, to in theory produce more significant gains when the price rises.

El Salvador has now bought at least 1,801 BTC based on information disclosed by Bukele.

Decentralized Exchanges Slash Trading Fees

Rising competition amid decentralized exchanges has seen some trading platforms move to slash their trading fees. Uniswap, the leading decentralized exchange, launched with a 30 basis point fee for all trades. However, with the introduction of Uniswap  v3 liquidity providers will be able to open pools with fees as low as 0.05%.

dYdX has now announced it’s experimenting with vastly lower fees depending on the size of trades, with the experiment set to last until at least mid-April. dYdX’s announcement reads:

“The fee changes were made to better compete with the fee schedule of top crypto exchanges, both centralized and decentralized.”

Uniswap has so far only lowered fees on a few pools, specifically those that use stablecoin pairs. Stablecoin pools are used by rival decentralized exchange Curve, which Uniswap has reportedly been taking market share away from after lowering fees on these pools

SEC Rejects MicroStrategy’s Bitcoin Accounting Adjustment

Comment letters released by the  U.S. Securities and Exchange Commission (SEC) reveal Nasdaq-listed business intelligence firm MicroStrategy won’t be able to remove swings in the value of its bitcoin holdings from its unofficial accounting measures.

The firm used non-GAAP rules, or measures that do not comply with U.S. generally accepted accounting principles, to show its income if it didn’t have to impair its bitcoin holdings. Under standard accounting rules, the value of cryptocurrencies must be recorded at their cost, and only adjusted if their value drops.

 In a filing, the SEC told MicroStrategy it objects to the firm’s “adjustment for bitcoin impairment changes” and asked it to “please revise to remove this adjustment in future filings.”

MicroStrategy replied saying it would “revise its disclosures of non-GAAP measures in future filings to remove the adjustment for impairment losses and gains on sale related to bitcoin, as requested by the Commission.” The firm holds about 124,391 BTC.

Chart of the Week: Likelihood of Lone Miner Winning Bitcoin Block Reward

Last week a solo Bitcoin miner with 126 terahashes per second (TH/s) of computing power managed to mine block 718,124 on the flagship cryptocurrency’s network to secure a 6.25 BTC reward, along with 0.1 BTC from fees. The miner’s chances of success were slim to none.

CryptoCompare’s most recent Chart of the Week shows that the miner had a 3.8% chance per year of finding a new block, or a statistically guaranteed reward every 27 years. The Bitcoin network has been around for a little over a decade.

Invictus Capital continues to deliver an uninterrupted path of growth across all its funds

The Invictus suite of funds offered commendable performance in a quarter marked by heightened volatility in the Bitcoin and broader cryptoasset market. All five of the Invictus funds registered positive returns for the quarter, with the vast majority outperforming their benchmarks. The simple average return across our suite of funds was 10.7% for the quarter, which is equivalent to an annualized return of 50%.

• The Crypto10 Hedged (C10) fund offered the greatest returns over the quarter at 23.91%, far outstripping its benchmark of 1.66% and Bitcoin at 12.36%. 

• Crypto20, the flagship fund, had a stellar year registering a return of 334.98%, it significantly outperformed its Top 20 equally weighted benchmark, which rose 261.92%.

• The Invictus Bitcoin Alpha (IBA) fund  managed to outperform Bitcoin throughout the fourth quarter, marking a total return of 14.56%, accompanied by significantly less volatility.

• The Hyperion venture capital fund continued on its impressive run, appreciating a further 5.05% off the back of a Quantfury dividend and Syntropy revaluation. The large dividend received by Quantfury will allow for a healthy level of buy-and-burn activity on the IHF token over the coming months.

• Invictus Margin Lending (IML) Fund registered a 2.48% net return (10.29% APY) for the quarter against its 1.48% benchmark hurdle.

Invictus Capital is now on the cusp of a historic migration into a fully-regulated fund structure that will place us at the forefront of innovation within the asset management space. It should also bring our investors the peace of mind that comes with additional, 3rd-party oversight of our operations.

Disclaimer:

Cryptocurrency trading involves high risk, and is not suitable for all investors. Before deciding to trade cryptocurrencies, tokens or any other digital asset you should carefully consider your investment objectives, level of experience, and risk appetite.

Its content does not constitute financial advice. Please remember that the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. If you are unsure of the suitability of your investment please seek advice.

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