January 31, 2023

3GI Ventures August 2022 Report

Monthly Market Commentary

The crypto market rallied at the end of July and the beginning of August. The movement was predominantly driven by global macroeconomic news when the July inflation print came in lower than that of June. Markets interpreted that as having seen peak inflation. The second factor that drove markets up during that period was excitement about the Ethereum Merge, a major upgrade impacting the second largest blockchain. Click here if you would like to learn more about the Merge.

We saw the positive sentiment reverse in the third week of August as fear of a global recessions were heightened after the U.S Federal Reserve Chairman, Jerome Powell, gave a hawkish speech at Jackson Hole warning that inflation is still a concern and the Fed will continue hiking rates in its fight to bring down inflation despite consequences that will hurt the job markets and lead to “some pain for households and businesses”.

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Risk assets such as crypto were impacted negatively and are expected to continue moving in tandem with the overall markets until a crypto-related force renews market sentiment.

3GI Key Highlights

3GI onboarded two new investors in August while two other existing investors topped up their initial investments. We currently have a total of 40 investors.

We opened a total of five new positions this month, of which the majority were invested in the Decentralized Finance (De-Fi) sector. We currently hold over 50 different assets in our portfolio.

All 3GI investments prior to August were based on a long-discretionary strategy but this month saw the introduction of two new strategies as part of our multi-strategy efforts. The first was a narrative based investment while the second is an event-driven investment. Long-discretionary strategy will continue to be our main focus and dominant portfolio strategy.

We are currently satisfied with our portfolio allocation in De-Fi and Infrastructure projects and will be turning our attention next month towards blockchain gaming.

Performance Vs Overall Crypto Market

The chart above illustrates 3GI fund performance versus the overall crypto market. As we can see, the total crypto market is down approximately -52.3% since the end of March 2022 ( 3GI launch date) while 3GI is down only -32.98%. Bitcoin and Ethereum are down -49.87% and -50.15% respectively.

Price of 3GI token is up 5.26% over the past 30 days and 6.21% over the past 90 days.

Yield Farming

Yield farming is analogous to earning yield on your shares in the form of dividends

From the approximately 50 assets we currently hold, 15 assets have been deployed across 24 yield farming strategies such as staking to earn a share of the relevant protocol fees or theta vaults. We have earned approximately 10.4% annualized yield on farmed assets.

Crypto Market Outlook

We believe that there might be further downside in crypto prices as the market narrative is still controlled by inflation, rate hikes and the increased chances of the economy slipping into a recession (if we aren’t already in one) and while the job market is still strong, it is starting to show signs of cracking. Nevertheless, we have measures in place that not only hedge the risk, but rather take advantage should such a scenario play out.

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