BK: FOMO and MOMO
While the rest of the financial markets meandered into May, the new asset class on the block was a peacock. Bitcoin strutted in full plumage to rise +24.84% in April. The BK Capital Digital Asset Fund continued to outperform with a +68.01% return for the month. Our year-to-date return is +172.73% compared with bitcoin’s +39.21% return.Fear of missing out (FOMO) and significant price momentum (MOMO) combined to create a unique investment environment.
Unique is an understatement; it was not unusual for digital assets to climb 30%+ in a single day. The price action in these markets reminded me of the euphoria that surrounded dot-com growth, reminiscent of a period that I thought long gone. I have lamented that I was too young and inexperienced to understand the internet boom, but that experience did teach me that disruptive technologies create booms that exceed our wildest projections.
Our thesis is that digital assets and blockchain technology have the potential to be even more disruptive than the internet, and as a result, are a once in a generation investment opportunity. Digital assets are a new investment class with superior returns and are uncorrelated to traditional investments. In April, this thesis continued to be supported.
The objective of the BK Capital Digital Asset Fund is to provide exposure to the high-growth digital asset sector by actively managing a portfolio of bitcoin and other digital currencies. Our goal is to beat the performance of bitcoin while providing an investment vehicle that is uncorrelated to all other asset classes.
For more information read the entire investor letter here.