October 2019 Market Commentary

Paul Cappelli, Portfolio Manager

November 1, 2019

Digital assets moved with market sentiment in October as regulators and the global macro environment took center stage in driving price action. The month started with a string of ETF proposals being denied for a final time as the SEC voiced continued concern over market manipulation, volumes, and price discovery. Regulators continued to drive sentiment and headlines as major regulatory bodies in the US expressed concerns around KYC and AML, coupled with the SEC putting a halt to the much-anticipated launch of the popular messaging app Telegram’s mainnet, on the basis that it failed to register its tokens as a sale of securities. Markets moved sideways much of the beginning of the month, then slumped before decisively reverting. Bitcoin led a historic rally of almost 40% on October 25th, the best one day move since 2012 and its third largest move ever. Much of the rally was attributed to Chinese president Xi Jinping speaking favorably about the future adoption of blockchain technology and the role of digitized assets both in a macro and socioeconomic context.

After an eventful month both fundamentally and technically, the Galaxy Benchmark Crypto Index Fund finished higher at 9.74%.

All six constituents in the Bloomberg Galaxy Crypto Index (BGCI) finished higher than their September close as the rally saw a high correlation amongst the largest and most liquid assets measured by the BGCI. Bitcoin finished up 11.51% on the month, with a final price of $9,189.42 to close back above $9kfor the fourth time in the last five months. The portfolio’s best performer was payment fork Bitcoin Cash, which rallied 24.86% on the month to close at $282.20. Ethereum saw an increase of 2.47%, while EOS, a Web 3.0 competitor was up 10.58% to close the month at $3.24. Payment token XRP had its third monthly increase of in 2019 and its second-best performance, rallying 16.42% for a mark of $0.2950. Despite seeing a continued decrease in use, hash rate, and volume, Litecoin had a modest month and was up2.42%, checking a final price of $58.37.

The BGCI had a monthly increase for the sixth time in 2019 with a return of 10.57%, for a final price of $389.63.