2023 Year End Market Review

BlackRock and other asset managers are marching their way to a Bitcoin ETF. The SEC is losing ground in the courts. SBF and FTX have been exposed and defanged. Generative AI is a new platform for innovation, and NVIDIA is flying. Early stage companies continue to be born, chasing dreams. Despite profound displacement, risk-on assets have survived.

Interest rates have potentially peaked and inflation has abated. There is hope that the central banks have stopped raising, and that the next leg of the exercise is to land softly without too much unemployment. While there is plenty to be concerned about over the next year — housing markets, valuations relative to earnings, China, lobal war, the deficit, Binance — are there things we can relax about?

There is a danger in making a two-sided, intellectually dishonest argument. If crypto is the apocalypse hedge, it performs well when inflation rises and countries lose economic discipline. But if crypto is a high-tech equity asset, then it performs well when money is cheap and there is plenty liquidity. These things seem contradictory. Similarly, if Web3 is the antidote to the excesses of the Web2 business model, then Big Tech has to shrink for decentralized networks to rise. Or, is it that we want attention from Big Tech, such that they integrate Web3 into existing networks? Do we want big banks to use DeFi or to be supplanted by DeFi?

We want it all. In the fog of ignorance, let’s search for an exit.

Below we present our macroeconomic, crypto market, Web3 and AI fundamental analysis at the end of 2023. For a copy of the presentation on these themes, don’t hesitate to reach out.