November 16th, 2023
Quick Takeaways:
- U.S. Inflation Slows: October CPI data shows promising signs of inflation cooling, with a potential shift in the Federal Reserve’s monetary policy on the horizon.
- Bitcoin’s Volatile Journey: A dramatic surge and decline for Bitcoin, highlighting the ever-present volatility in the crypto market.
- Altcoin Surge: Significant gains in altcoins, with Ethereum drawing increased institutional interest and altcoin market cap reaching a new high in 2023.
- Strong Performance by Diamond Pigs Strategies: The Hereford and Berkshire strategies outperform, while Gascon posts solid gains, reflecting the dynamic nature of the crypto market.
The Financial Market
U.S. inflation data for October revealed a promising trend with the Consumer Price Index (CPI) staying flat, countering expectations of a 0.1% rise, and the core rate increasing only by 0.2%, below the forecasted 0.3%. This slowdown in inflation, while still above the Federal Reserve’s 2% target, has led to market speculation about the potential end of the Federal Reserve’s 20-month monetary tightening cycle. Joseph Brusuelas, Chief Economist at RSM, notes the decline in core goods prices and anticipates further disinflation, especially with shelter costs expected to moderate into mid-2024. Following this report, the likelihood of the Fed maintaining steady rates in the upcoming meetings has significantly increased, indicating a more stable financial market outlook as the year draws to a close.
The Crypto Market
This week witnessed a rollercoaster ride in the crypto market, with Bitcoin surging to $38,000, a level not seen in 18 months, only to face a sharp $2,000 decline within minutes. Despite a brief recovery over the weekend, Bitcoin experienced a dip to a weekly low of $35,000 but remarkably rebounded, touching $38,000 again. Alongside Bitcoin’s volatility, BTC dominance has shown a declining trend, dropping from a peak of 54.5% at the end of October towards the altcoin market.
Major altcoins like ETH, LINK, and LTC saw modest gains up to 4%, while more significant surges were observed in other Layer 1 protocols such as Solana (SOL) and Avalanche (AVAX), and decentralized exchanges like ThorChain (RUNE), DYDX, SNX, and others. This dynamic movement has led to a rise in the total altcoin market capitalization, reaching a 2023 high of $659.5 billion, and sparking talks of an altcoin season. The total crypto market cap saw a substantial increase, nearing $1.45 trillion, highlighting a week of significant activity and bullish trends in the cryptocurrency space.
Diamond Pigs Strategies
In the dynamic world of cryptocurrency investments, our strategies have been showcasing strong performances. Leading the pack over the last three months is the Hereford (Bitcoin Protection) strategy, consistently delivering impressive results. Joining the ranks of top performers is the newcomer, Berkshire – an index strategy focused on the top 10 market cap coins, has demonstrated a particularly strong performance in the last 30 days, achieving a 46.1% gain. This success is largely attributed to the phenomenal price performance of coins like SOL and LINK.
Not far behind is the Gascon strategy, a BTC and ETH focused approach, which has realized over 30% gain in the same timeframe.
As the momentum in the crypto market appears to be increasingly favoring altcoins, it’s an opportune moment for our mixed crypto strategies, Duroc and Pennywell, to accelerate their growth in the upcoming weeks. These strategies, tailored to capitalize on the diverse movements within the altcoin market, are positioned to leverage the shifting trends and deliver promising outcomes.
Summary
In this edition of the Diamond Pigs Newsletter, we delve into the latest trends in both the financial and crypto markets. The U.S. inflation data for October shows a promising downturn, suggesting a potential ease in the Federal Reserve’s monetary policy. In the crypto realm, Bitcoin experienced a tumultuous week, while many altcoins saw significant gains amid growing institutional interest. This has led to speculation about an impending ‘altcoin season’ with the altcoin market capitalization reaching a new high for 2023.
On the strategy front, Diamond Pigs’ Hereford and Berkshire strategies have shown exceptional performance, especially in the fast-moving crypto market. These successes highlight the value of agile and diversified investment strategies in navigating the complex and volatile crypto landscape.
As we look ahead, the focus is on maintaining a strategic edge in a market that is increasingly leaning towards altcoins, with our Duroc and Pennywell strategies poised to capitalize on these evolving trends.