Category: Bitcoin

Alternative Markets Update - Macro And Political Outlook June 2019

13/6/2019

Alternative Markets Update June 2019

June started in a more dynamic fashion for hedges funds are already recouped May’s losses. The anticipation of an interest rate cut this year as a result of Fed’s announcements resulted to a strong bounce back for equity markets. Equity hedge strategies profited the most during the first weeks of June, a month that so far is characterised by the trade war discussions and further tariff plans from US. Macro and CTA strategies had their bets right so far this month and they are waiting to capitalise on future volatility events. Bitcoin’s momentum slowed down in June and its price has receded from $8,740 to $7,900, reaching a market cap of $140bn. Ethereum had also a

slightly negative month so far and is keep following the same pattern as bitcoin.

Macro and Political Outlook June 2019 MacroEagle

Source: MacroEagle

Alternative Markets Update Q1 2019 - Macro and Political Outlook April 2019

16/4/2019

Alternative Markets Update Q1 2019

After a rather disappointing last year, hedge funds bounced back and are enjoying their strongest quarter since 2006 according to data from HFR, with macro and CTA strategies leading the race so far with gains driven from their fixed income exposure. Private equity is also enjoying a good first quarter with growth equity strategies raising almost $25bn and the number of deals has also increased compared to the last months of last year. Private debt fundraising on the other hand has slowed down, with larger firms claiming the largest part of the pie and creating a rather concentrated industry with high level of dry powder and uncertainty due

to geopolitical reasons. Bitcoin and Ethereum enjoyed a strong rally during the first quarter of 2019, surpassing $5,000 and $160 respectively.

Macro and Political Outlook April 2019 MacroEagle

Source: MacroEagle

Alternatives Market Outlook H2 2018

16/8/2018

STONE MOUNTAIN CAPITAL RESEARCH PERSPECTIVE VOL.88

Figure 1. Stone Mountain Capital In-House Indices vs. Major Benchmark Indices Hedge Funds and Long Only in H1 2018, Stone Mountain Capital Research SMC strategy indices are not investable products but are used as indication of our managers’ performance and are calculated with the equally-weighted method.

H1 2018 was rather disappointing for hedge funds, seeing outflows by end of the second quarter. According to data from Hedge Fund Research, investors invested more capital in equity hedge strategies, while they redeemed from event-driven, macro and relative value strategies. The shift in strategies was driven by the rising concerns over potential trade war, monetary policies from central banks, including interest rate decisions, and political uncertainty in major European countries. Performance was strong for strategies focusing on tech, and our equity long short manager sits on the top of our top-performing table. The divergence in central bank policies has favoured macro strategies focusing on traditional relative value bets and event-driven strategies that have catalyst elements. Our top performing strategies table consists of discretionary macro focusing on relative value trading and equity strategies that are engaged in activism and have a niche in US equities markets.

Our in-house strategies in credit, equity and fund of funds, as measured by our indices, have performed better in the first half of the year than their traditional and alternative peers. Tactical trading is still lagging due to the struggling performance of the actively managed altcoin strategy this year mainly driven by falling bitcoin prices. Equities are the top performing and the bucket that has the most representatives in the top-5 performing table, followed by credit/fixed income strategies.

Elliot waves Principle and Cryptocurrencies

19/5/2018

Oliver Fochler
Managing Partner, CEO
Tel.: +44 7922 436360

Alexandros Kyparissis
Analyst Hedge Funds
Tel.: +44 7843 144007

STONE MOUNTAIN CAPITAL RESEARCH PERSPECTIVE VOL.81

Indubitably, the cryptocurrency market has caught the attention of investors and traders, who are engaging vigorously due to its volatile nature. The crypto market has reached a market capitalisation of ca. $400 billion, half of which is in Bitcoin ($140bn) and Ethereum ($70bn). Crypto markets are affected on a large scale by regulatory and sentiment factors, which makes technical analysis desirable, hence many CTAs that apply such techniques have added cryptocurrencies in their trading portfolios. One of the theories that could reveal patterns is the Elliott Wave Principle, developed in the late 1920s and believing that the swings of market psychology appear in similar repetitive patterns, which Elliot classified as waves. The waves were essentially the consistencies of investors’ reactions to external factors. Despite the principle’s popularity, its difficulty to be applied should be stressed out as investors attempt to analyse the patterns. The divergence in opinions about the Bitcoin’s price projection highlights the predicaments in applying theories and considering the unregulated nature of crypto markets all theories may lead to a worth of zero. The main and biggest issue that technical traders face is defining the duration and length of the first wave and then to apply the rules, therefore many traders that analyse the same horizon may end up with different signals. The other hurdle is the applicability of the principle in cryptocurrencies. This perspective will consider it applicable due to the sentiment driven Bitcoin, although this may change in the future with the inclusion of more computerised trading. For the purpose of this perspective, we will examine different time horizons and the most recent crashes and rallies of the Bitcoin price.

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Alternatives Market Review 2017

1/2/2018

Oliver Fochler
Managing Partner, CEO
Tel.: +44 7922 436360

Alexandros Kyparissis
Analyst Hedge Funds
Tel.: +44 7843 144007

Hedge Funds
Hedge funds started 2017 under pressure and the overall industry’s model was in question. Performance and fees were the main topic of debate among investors at the beginning of the year, but hedge funds managed to pull a strong year with no down month. Despite losses from some large managers, the industry overall generated strong returns according to HFR data attracting more capital. Per HFR, total hedge fund industry AuM increased by $59bn to $3.21tr, the sixth consecutive quarterly record for total industry AuM. The inflows suggest a sign of regained optimism, but the industry will need to sustain its performance long-term in order to regain its calibre. The oxymoron of the industry is the fact that equity hedge were the best performing strategies amongst hedge funds but suffered the biggest outflows. Macro, CTAs and multi-strategy attracted more capital this year, and given the outlook for more volatility and less central bank intervention, investors target further allocations in those sub-sectors.

Figure 1. 2017 Hedge Fund Industry Performance, Source: HFR, Stone Mountain Capital Research

Figure 2. 2017 Hedge Fund Industry AUM, Source: Preqin

Stone Mountain Capital Strategies
2017 was the year producing the strongest return for hedge funds since 2013 and second best since 2009. Stone Mountain Capital strategies outperformed in last year’s environment across all asset classes. Credit was the only strategy underperforming its peers, caused by yield compression in the direct lending space. One, out of only three negative strategies was in credit, while the other two, were CTAs that struggled amid the low volatility and trendless environment. Despite these two strategies, tactical trading was overall the best performing strategy with strong returns generated by discretionary global macro and cryptocurrency. Equities enjoyed a very profitable year and Stone Mountain Capital’s mandated equity hedge managers produced astonishing returns, beating their traditional and alternative peers. Finally, fund of hedge funds recovered from their 2016 losses, surviving while the industry’s model is evolving.

Figure 3. Stone Mountain Capital In-House Indices vs. Major Benchmark Indices Hedge Funds and Long Only in 2017, Stone Mountain Capital Research; SMC strategy indices are not investable products but are used as indication of our managers' performance and are calculated with the equally-weighted method.

Figure 4. Distribution Stone Mountain Capital’s 30 Hedge Fund Strategies 2017 Returns, Stone Mountain Capital Research

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Alternative Markets Update - Macro And Political Outlook June 2019

Alternative Markets Update Q1 2019 - Macro and Political Outlook April 2019

Alternatives Market Outlook H2 2018

Elliot waves Principle and Cryptocurrencies

Alternatives Market Review 2017

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