Through the crypto winter – in November and December of 2018, Bitcoin was down 35%, while BitBull’s Opportunistic Fund (“BitBull”) returned +29%. How did we outperform the bear market which negatively impacted the entire crypto space? In this article, we cover some of our strategies. For more returns, please visit www.bitbullcapital.com.

BitBull manages two funds:

  • Opportunistic Fund, which directly invests in cryptos in a variety of ways,
  • Fund of Funds, which has done diligence on hundreds of the 600 existing crypto funds and their strategies, and is an investor in 10. We continually do diligence on new crypto funds, and allocate to ones that we believe will return well, as well as rebalancing our existing crypto fund investments monthly.

BitBull’s investments in many crypto hedge funds, and diligence on hundreds, gives us a unique vantage point in terms of identifying such opportunities and leveraging them to the fullest.

Our Opportunistic Fund benefits from two main activities in general:

  1. Identifying opportunities (Basic Attention Token and Tezos are two recent examples)
  2. Active fund management (a mix of market neutral and directional strategies)

While BitBull Capital’s Opportunistic Fund’s strategies include market-neutral activities such as arbitrage, much of the returns are due to selecting the right assets at the right time. For example, in the recent negative months, such as November and December of 2018, and January of 2019, part of the way we were able to have positive results was due to our contrarian–and correct–viewpoint that crypto would continue to drop, and waiting for those drops before buying in, then selling on the rise.

We are also proud of consistently achieving these results with relatively lower risk. With BitBull’s Opportunistic Fund, we attempt to be the rare crypto fund that achieves results while maintaining a low Value at Risk (VaR); while many other crypto hedge funds may drop during months that crypto drops because of a high VaR. This enabled us to return positive results like +13% in November and +14% in December when Bitcoin returned -36% and -2%, respectively.

We’ve also shown an ability to return more than Bitcoin in its positive months; for example, in February when it returned 11%, we returned 32%. Notably, Bitcoin is a single asset, while BitBull invests in multiple assets. For asset selection, we engage a number of strategies. We’ve found there’s no substitute for actual research and hard work. Our catalyst-driven investments have repeatedly returned for us. Our strong network within crypto and blockchain, from technologists to journalists, first-hand deal diligence, acumen over years of investing in the space, and presence at major crypto and blockchain events helps us continue learning and acquiring recent and relevant knowledge.

Some examples of our network and diligence:

On a panel in March with Brendan Eich, co-founder of Basic Attention Token, Brave, Mozilla/Firefox, and Javascript. Basic Attention Token is up 23% so far in April.

On a panel in March with Brendan Eich, co-founder of Basic Attention Token, Brave, Mozilla/Firefox, and Javascript. Basic Attention Token is up 23% so far in April. https://twitter.com/BitBullCapital/status/1111988202859085830

On a panel in March with Brendan Eich, co-founder of Basic Attention Token, Brave, Mozilla/Firefox, and Javascript. Basic Attention Token is up 23% so far in April.

https://twitter.com/BitBullCapital/status/1111988202859085830

At the Coinbase’s private event for institutional partners, where their CEO Brian Amstrong discussed Coinbase’s roadmap and that they were soon going to custody Tezos on Coinbase. Tezos is currently up by 12.84% in April.

At the Coinbase’s private event for institutional partners, where their CEO Brian Amstrong discussed Coinbase’s roadmap and that they were soon going to custody Tezos on Coinbase. Tezos is currently up by 12.84% in April.

At the Coinbase’s private event for institutional partners, where their CEO Brian Amstrong discussed Coinbase’s roadmap and that they were soon going to custody Tezos on Coinbase. Tezos is currently up by 12.84% in April.

https://twitter.com/BitBullCapital/status/1111767575225085953

Listening intently to Clay Robbins, Ecosystem Lead at 0x, while we were on the panel at FinTechSV’s Crypto Exchanges event.

Listening intently to Clay Robbins, Ecosystem Lead at 0x, while we were on the panel at FinTechSV’s Crypto Exchanges event.

Listening intently to Clay Robbins, Ecosystem Lead at 0x, while we were on the panel at FinTechSV’s Crypto Exchanges event.

https://twitter.com/pemo/status/1110952390348279808

Opportunities:

  • Equity (our fund of funds includes equity in Coinbase, mining companies, and blockchain technology ventures, among others)
  • STOs/ICOs
  • Event-driven, catalyst-driven, and special situations (Tezos example)

Market-Neutral and Relative Value:

  • Volatility-weighted positions, leveraging crypto’s unique volatility
  • Arbitrage

During a bear market, such as the one in 2018, market-neutral strategies can do exceptionally well, provided there is proper risk management. We were able to successfully utilize strategies such as volatility trading and arbitrage to generate alpha during this stage.

For the current scenario (in 2019), where Bitcoin has once again appreciated in price, we were ready at BitBull to capitalize on that and indicated the possibility of Bitcoin posting positive results in our February and March investor updates.

A key factor behind posting positive results is the consistent realization of gains. Most investors hold digital assets for long periods, foregoing the profits which can be attained via active portfolio management. For example, if the market is displaying considerable volatility within a range, there are opportunities to move in, realize a gain by selling at a higher price and repeating the cycle, instead of waiting for a broader market recovery to realize profits.

At BitBull Capital, our research also focuses on identifiable market behaviors, such as recent observance of Bitcoin rising, while most altcoins either froze or posted slight declines. This continues until Bitcoin finds a stable price range to consolidate in, and that is when profits from the surge spillover into other assets. This is a new trend. However, the downside risk to this is also worth mentioning, where when Bitcoin drops in price, the effect is typically exaggerated for altcoins.

Ultimately, active management involves a host of activities and consistent portfolio balancing in light of market dynamics and emerging opportunities, whether they are driven by specific events or present themselves as promising deals.

As always, we remain committed to achieving optimal results for investors and continue to change our strategies to suit the prevailing market dynamics and environment.

If you have any questions about BitBull’s Opportunistic Fund, please feel free to contact us.

Disclosure:

As of the publication date of this report, BitBull Capital Management LLC and its affiliates (collectively “BitBull”), others that contributed research to this report and others that we have shared our research with (collectively, the “Investors”) may have long or short positions in and may own options on the token of the project covered herein and stand to realize gains in the event that the price of the token increases or decreases. Following publication of the report, the Investors may transact in the tokens of the project covered herein. All content in this report represent the opinions of BitBull. BitBull has obtained all information herein from sources they believe to be accurate and reliable. However, such information is presented “as is,” without warranty of any kind – whether express or implied.

This document is for informational purposes only and is not intended as an official confirmation of any transaction. All market prices, data and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and BitBull’s views as of this date, all of which are accordingly subject to change without notice. BitBull has no obligation to continue offering reports regarding the project. Reports are prepared as of the date(s) indicated and may become unreliable because of subsequent market or economic circumstances.

Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This report’s estimated fundamental value only represents a best efforts estimate of the potential fundamental valuation of a specific token, and is not expressed as, or implied as, assessments of the quality of a token, a summary of past performance, or an actionable investment strategy for an investor.

This document does not in any way constitute an offer or solicitation of an offer to buy or sell any investment or token discussed herein.

The information contained in this document may include, or incorporate by reference, forward-looking statements, which would include any statements that are not statements of historical fact. These forward-looking statements may turn out to be wrong and can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, most of which are beyond BitBull’s control. Investors should conduct independent due diligence, with assistance from professional financial, legal and tax experts, on all tokens discussed in this document and develop a stand-alone judgment of the relevant markets prior to making any investment decision.

This blog may contain forward-looking statements that are based on BitBull’s experience and expectations about the markets in which the fund invests and operates. Forward-looking statements are sometimes indicated by words such as “anticipates,” “expects,” “believes,” “seeks,” “may,” “intends,” “plan,” “should,” “attempts,” “will,” “intended to,” “designed to,” “seeks to” or the negative of these terms or other similar expressions. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Forward-looking statements are not guarantees of future performance and are subject to many risks, uncertainties and assumptions that are difficult to predict. Actual results may differ, and such differences may be significant. Neither the fund nor BitBull Capital undertakes any obligation to revise or update any forward-looking statement for any reason, unless required by law. The forward-looking statements contained in these blogs are expressly qualified by this cautionary statement.

This blog is meant only to provide a broad overview for discussion purposes. While information used in these materials may have been obtained from various published and unpublished sources considered to be reliable, neither BitBull nor any of its affiliates guarantees its accuracy or completeness and accepts no liability for any direct or consequential losses arising from its use. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.

This blog does not constitute an offer to sell securities or a solicitation of an offer to buy or sell any securities.

No graph, chart, formula, or other device offered can, in and of itself, be used to determine which securities or assets to buy or sell or when to buy and sell assets or securities, and is not meant to assist any person in making investment decisions. We are not falsely promising to furnish reports or analysis free of charge to investors.

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