Flagship Portfolio Vault Update - Week 45

Vault rebalances

Recent discussions within the Bank of Japan (BOJ) have revealed a shift in their long-standing policy stance. Policymakers are considering phasing out their massive stimulus program and preparing for an eventual rise in ultra-low interest rates. This change in direction comes as they acknowledge the need to lay the groundwork for a sustainable exit from their easy monetary policy.

Simultaneously, the US dollar, which has been strong due to a robust US economy and rising Treasury yields amid Federal Reserve rate hikes, is showing signs of weakening. Expectations that the Fed may halt rate increases have contributed to the dollar's decline, making it less dominant compared to other major currencies.

This macroeconomic shift has implications for risk assets. A weaker dollar typically boosts risk assets as it makes them more affordable to international investors. Moreover, the potential easing of BOJ's policy could inject more liquidity into the market, further supporting risk assets.

Risk profile

Our risk profile remains bullish, largely due to the weakening dollar. This, along with the increasing Total Value Locked (TVL) in stablecoins and Bitcoin's consistent performance against traditional markets, has maintained our shift.

For a complete overview of the biggest news and most important data, check out our weekly Market Update.

Rebalancing Decisions

Equity Markets

Our bullish stance is influenced by Bitcoin's low correlation with the global liquidity index and the US equity market. We expect this trend of strength to persist across all risk assets.

Forex

We have maintained our bullish stance due to the dollar's apparent weakness. The Dollar Index is losing its high timeframe support and seems poised to fall back into its range. Should we see the Dollar Index retreat into its range, we may consider increasing our positions in long risk assets.

Portfolio Vault Assets update

Bitcoin

Over the past week, Bitcoin has seen a 3.76% increase. The 9th of November marks the beginning of a critical nine-day period for the crypto market, particularly for Bitcoin, as the U.S. Securities and Exchange Commission (SEC) enters its last window of the year to approve a series of spot Bitcoin Exchange-Traded Funds (ETFs). This window could potentially see the green light for all 12 spot Bitcoin ETF applications.

The anticipation surrounding this approval period has coincided with a notable breakout for Bitcoin, which has surged past the $35,000 mark, exiting a two-week price range. This movement suggests that investors are optimistic about the potential for these ETFs to receive approval, which could significantly enhance Bitcoin's accessibility to a broader range of investors.

Gold

Over the last week, gold has experienced a modest decrease of 1.96%. As political unrest and conflict in the Middle East begin to subside, gold may no longer stay in the spotlight. Currently, gold is trading at support; if it breaks below this level, we could see it revert to trading around $1800

TON

Over the past week, TON has seen a 18.14% increase and has recently integrated with Telegram, providing access to 800 million monthly active users. Although TON has transitioned from one of our weaker assets to one of our stronger ones. As the market's risk tolerance grows, assets with solid fundamentals, like TON, are likely to experience a steady upward trajectory. The integration of wallets is fostering more dapp development within the TON ecosystem, further strengthening its position

Pendle

Pendle has increased by 2.47% over the last seven days, reversing both its long-term and short-term trends. The Total Value Locked (TVL) has reached a new all-time high, with its user base expanding continuously. As the new Arbitrum grants begin to be distributed, we expect the trading volume to continue increasing.

Solana

Solana has risen by 7.51% in the last seven days. With a robust developer and user base, we have allocated a portion of our portfolio to Solana due to its ongoing development of a second validator client, Firedancer, which aims to match the transaction speed of centralized exchanges for DeFi, thereby unlocking a new potential market segment. 

Besides, Solana boasts many promising accomplishments such as Solana Pay, Visa integration, and the Solana Saga Phone, which further piques our interest in this burgeoning blockchain platform.

Lybra

Lybra is up 30% in the last seven days This past week, a project named Prisma Finance launched, seemingly igniting a new wave of LSDfi. As Lybra is one of the most prominent LSDfi projects in the space, we believe it will move in tandem with the broader DeFi sector.

Render Network

Render is down 1.4% in the last seven days Render has shown an increasing trend of real world adoption, partnerships and use cases over the past months. The Render Network is also now live on Solana. This upgrade brings the new SPL-based token with incentives for early adopters and liquidity pool rewards.

Fetch.AI

Fetch is up 7.70% in the last seven days. Fetch has an ongoing partnership with Bosch to form a web3 foundation. Additionaly, with their combined R&D, Bosch aims to become a frontrunner in electromobility.

Arbitrum

Arbitrum has increased by 8.89% over the past week. A new proposal passed on Arbitrum that aims to introduce a staking mechanism for the ARB token, which currently lacks native utility or yield. 

The proposal suggests allocating a percentage of the total ARB supply from the DAO treasury to a staking contract to incentivize token holders to engage with the network. The introduction of a staking mechanism and the active involvement of the ARB community in the decision-making process could potentially enhance the utility, demand, and value of the ARB token. On top of that Arbitrum grants have started hitting the chain.

Vault Composition

Due to the recent price action, we have decided to maintain the current composition of the Portfolio Vault

From the Outposts

• Bitcoin is up, is altseason coming? (Read More)
• How we determine the Flagship Portfolio Vault's risk profiel (Read More)

Until next week,

Flagship’s Captain team