Portfolio Vault Update - Week 8

Vault rebalances

Nvidia's recent earnings release was met with high anticipation across the market, akin to the tension before pivotal inflation data announcements. The stakes were particularly high, as a performance that failed to surpass expectations could have led to negative repercussions across the board. This sentiment was underpinned by Nvidia's significant role in driving the S&P 500's rally this year, contributing to about a quarter of the index's gains. The company's financial results not only exceeded Wall Street's forecasts but also showcased its dominance in the rapidly evolving artificial intelligence sector. Nvidia's success has become a barometer for market sentiment, making this earnings report a crucial moment for investors and analysts alike, who were on edge, understanding that the outcome could sway the market's direction.

Moreover, Nvidia's remarkable performance and strategic positioning have been pivotal in fueling the surge in both the cryptocurrency and artificial intelligence (AI) sectors. As a leading supplier of high-performance computing chips, Nvidia has found itself at the heart of the AI revolution, with its technology being indispensable for powering sophisticated AI models and applications. This demand has been further amplified by the rapid adoption of AI technologies by major tech giants and various industries seeking to leverage AI for innovation and efficiency.This dual influence of Nvidia on both the AI and crypto markets underscores the company's significant impact on technological advancement and market trends. As Nvidia continues to lead in providing essential hardware for AI development and cryptocurrency mining, its financial successes and strategic moves are closely watched by investors and industry observers, highlighting its role in driving the momentum in these cutting-edge sectors.

Risk profile

We have decided remain ultra bitcoin bullish as our indicators are flashing an ultra bullish crypto environment. While it's not an alt season environment, we are observing certain altcoins outperforming the market. Consequently, we have decided to maintain our current portfolio assets and not rebalance. Therefore, our risk profile can be classified as ultra bullish.

Portfolio Vault Assets update

Bitcoin

Following a record week of inflows into crypto investment products, US spot bitcoin ETFs, notably those offered by VanEck, WisdomTree, and Bitwise, experienced unprecedented trading volumes. Matt Hougan, Bitwise's Chief Investment Officer, highlighted the remarkable demand for these ETFs, noting the trading of a record 6.3 million shares, worth approximately $179 million, of the Bitwise Bitcoin ETF on a single Tuesday. This surge in interest was not isolated to Bitwise alone, as VanEck and WisdomTree also saw significant spikes in their trading volumes post-holiday weekend, with VanEck's Bitcoin Trust ETF reaching 6.8 million shares or $400 million in trading volume, and WisdomTree's Bitcoin Fund hitting over 4 million shares or about $220 million in volume.

These volumes represent a dramatic increase from their initial days on the market, indicating a growing investor appetite for bitcoin and crypto investment vehicles. The overall trading volumes for US spot bitcoin ETFs (excluding the Grayscale Bitcoin Trust) hit around $2 billion, marking a significant milestone since their market debut. This heightened activity aligns with a record $2.45 billion inflow into crypto investment products in the preceding week, showcasing a robust and escalating interest in the crypto space.

The spotlight was also on the BlackRock and Fidelity issued bitcoin ETFs, which led the inflow surge, further underscoring the momentum behind bitcoin investments. With the industry on track to surpass initial inflow estimates significantly, the recent spikes in trading volumes and inflows reflect a burgeoning confidence and a potential second wind in the crypto ETF market, signaling a strong, ongoing interest from both retail and professional investors in the burgeoning bitcoin and broader cryptocurrency investment landscape.

The Open Network

Over the past week, TON has seen a 3.94% decrease. The thesis for TON has not changed, as the integration of wallets is fostering more dapp development within the TON ecosystem, further strengthening its position. 

Pendle Finance

Pendle has decreased by 16.17% over the last seven days, continuing both its long-term and short-term trends. The Total Value Locked (TVL) has consolidated after reaching a new all time high this week, but Pendle keeps achieving milestones on a weekly basis.

Solana

Solana has decreased by 8.75% in the last seven days, with the chance of it breaking out of its range. With Solana overtaking Ethereum on DEX volumes, it seems that most on chain participants have flipped over to Solana because of the cheap fees. We are now seeing a new wave of innovation with the SPL token standard.

Fetch

Fetch is up 68.55% in the last seven days. Fetch's usecase is somewhat similar to the new release of OpenAI, Custom GPTs. OpenAI saw a surge of new users after the annoucement of this feature, as has temporarily stopped the onboarding of new users because of a network

Bittensor

Bittensor is up 1.10% in the last seven days. The launch of subnets in October was a tremendous success, with subnet slots filling up with exciting projects. Subnets have allowed the creation of a plethora of mechanisms on Bittensor, but the design is not complete. Subnet emissions are currently determined by a group of validators on Subnet 0. This was a good initial way to bootstrap the system, but is not sustainable long term, as it creates centralization around subnet 0.

Celestia

Celestia is down 7.45% in the last 7 days. Celestia is a modular consensus and data network that enables anyone to easily deploy their own blockchain with minimal overhead. Celestia is built on the Cosmos SDK and uses Tendermint as its consensus mechanism. Celestia has a huge hype for airdrop farmers, as every celestia partner is airdroping tokens to Celestia stakers.

Pyth

Pyth Network is down 15.48% in the last 7 days. The core application of Pyth Network lies in providing real-time, accurate financial data to blockchain-based DeFi applications, thereby enhancing their functionality and reliability. With new applications being launched everyday, more and more of these are picking Pyth over Chainlink as an oracle provider. This has caused the gap in market cap to diminish. There is a lot of speculation going around that Pyth Stakers will also be receiving numerous airdrops in the future.

Vault Composition

Due to the recent price action and market circumstances, we have decided keep the vault allocation the same as it currently is.

Until next week,

Flagship’s Captain team