The Crypto10 Hedged crypto index fund has performed well over the past year and is an award winner. More importantly, it has allowed me to sleep at night with cash hedging during the market plunge. Invictus Capital has a proven track record and are leaders in the tokenised asset space.

It has been a little over a year since I last wrote about Invictus Capital’s crypto funds and crypto index funds in general. I felt it was about time I reviewed the crypto markets rollercoaster and my choice to invest in Invictus Capital’s funds.

What happened to the market? Which really means: what happened to Bitcoin?

Market Rollercoaster

Looking at the chart, we see a rollercoaster with a big pump to $13k in late June 2019 and an equally alarming drop below $5k in March as the world struggled with a pandemic. It’s exactly the kind of volatility that Bitcoin is famous for.

Bitcoin price chart in USD from 2016 through 2020

We see the gains from 2019 have been wiped out. However, we also see a big upwards move since the lows in March 2020. Bitcoin is once again consolidating in the $8-9000 channel, building stronger support at these levels.

Altcoins and Crypto Index Funds

I discussed how to gain exposure to the broader crypto universe and those crack-like altcoins in my 2019 review of cryptocurrency index funds. After consideration and analysis I favoured two funds from Invictus Capital:

  • Crypto20 Fund
  • Crypto10 Hedged Fund

I liked the pure passive exposure the Crypto20 Fund gives to the top 20 cryptos, weighted by market capitalisation. I really liked the cash hedge of the Crypto10 Hedged fund to protect me in a bear market. In early May 2019 I bought some shiny ERC20 tokens of both funds.

So, what happened with each of these funds?

Invictus Capital Fund Performance

$NAV
27 April 2019
$NAV
27 June 2020
% Change
14 months
BTC52659160+74
Crypto 200.54010.4897-10
Crypto10 Hedged1.131.37+21

It’s clear that Bitcoin has been a big winner over the past year, gaining some 74% over 14 months! Bitcoin anywhere near $5000 levels is a buy zone when looking at the long-term log trend of Bitcoin. This aligns with my own maximalist crypto convictions.

2019 to 2020 relative performance of Crypto10 Hedged and Crypto20 crypto index funds
2019 to 2020 relative performance of Crypto10 Hedged and Crypto20

Crypto20 certainly rose during the peaks of 2019 and had a peak Net Asset Value of around $0.92. The value fell during the market correction and remains some 10% below the start value. This speaks to the relative under-performance of altcoins compared to Bitcoin during the market downturn.

Crypto10 Hedged rose and then fell with the market. However, a strong hedge to cash was made which arrested losses and kept the asset value steady over much of this downturn. As the markets have rallied and built resistance, so the value of Crypto10 Hedged  has begun to increase, finishing more than 20% up! That’s winning performance for this crypto index fund.

My experience favoured Crypto 10 Hedged and Bitcoin

I put cryptoassets firmly in the speculation category. That means I speculate only with money I can afford to lose. Given it’s high risk, it’s also the most exciting asset class and one I watch more closely than investments. In my opinion, true investments should be boring and should not require frequent monitoring. Speculation is for play and for learning.

I watched the rollercoaster unfold and the volatility of Bitcoin in particular. The volatility of the Crypto20 Fund was similar to Bitcoin. I began to feel that I may as well experience this level of volatility and also have the utility of the underlying asset by directly holding Bitcoin instead. I already felt exposed to the top 10 altcoins through the Crypto10 Hedged Fund. So, I traded my Crypto20 holdings to Bitcoin on open exchange (thanks hitBTC) and moved my sats to a wallet I control.

I’ll retain exposure to the broader crypto asset class through Crypto10 Hedged and enjoy the cash cushioning against downside risk. I really loved seeing the C10 asset not drop below original purchase price – despite Bitcoin more than halving in price! That’s the dynamic algorithmic cash hedge in action – “smart passive”. It’s also fascinating to see the crypto assets that jostle for position in the top 10 and how they come and go over time. I appreciate that I don’t have to monitor all new cryptos and pay the associated costs for holding and trading those individually on exchanges or custom wallets.

The dynamic cash allocation of the Crypto10 Hedged index fund over time
The dynamic cash allocation of Crypto10 Hedged over time

Crypto 10 Hedged beats the world – a winning strategy and team?

It seems I picked a crypto index fund winner: the Crypto10 Hedged Fund won 3rd in overall performance “Net Return – all Strategies” and won 1st in its category of “Net Return – Long-only”. These awards were provided by Crypto Fund Research, who make money selling access to their growing database.

Readers here may have followed my recommendation for Crypto10 Hedged last year. The fund’s strategy seems well thought out and has been well executed by an engaged team. I still recommend reading the Crypto10 Hedged litepaper.

Crypto10 Hedged index fund wins awards from Crypto Fund Research
Crypto10 Hedged wins awards from Crypto Fund Research

Invictus Capital Futures

Invictus Capital has charmed me with their Crypto10 Hedged performance and cash cushioning. I value holding the ERC20 tokens in my own wallet. I’ve enjoyed the interface of their investment portal. The platform is developing and improving with new fiat and crypto onboarding methods and a new portal wallet.

Invictus are innovating in other tokenised assets, such as gold, property, solar and lending.

Invictus Margin Lending Fund

The Invictus Margin Lending fund is used by C10 Hedged as an additional earner to offset fund management costs. I noticed this and appreciated it. I really like the lack of correlation with other asset classes and see this as diversification within the crypto space. I’ve subsequently speculated further capital into the Margin Lending Fund and hold my shiny digital ERC20 tokens. I see the potential for steady and decent gains with far less volatility. As always, do your own research.

My next plan is to steadily increase my crypto exposure automatically, so I don’t try to time the market. My solution is to deploy new capital on a regular basis – so called dollar cost averaging. I’m on the hunt for a way to invest fiat currency automatically on a monthly or periodic basis from a UK bank account. This is how we go mainstream.

Finally, have another look at the chart and see the volume grow as adoption grows…

Bitcoin USD price chart 2016 to 2020
Bitcoin USD price chart 2016 to 2020


1 Comment

James · 28th October 2020 at 6:44 pm

Good article. I share your views. On a technical note, you may be aware that DCA is only suitable for converting income into investments. Capital sum should be invested 100 pc immediately. To cut a long story short this is because on average markets are rising so delaying investments causes diminished returns. DCA also does not reduce the variance in return.

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