2022-07-31

Profiting During a Crypto Bear Market - July 2022 Fund Update

Profiting During a Crypto Bear Market - July 2022 Fund Update

OVERVIEW

Our thesis of creating asymmetric returns by applying algorithmic risk management on high-growth assets continues to be validated and our focus on the intermediate and long-term digital asset market cycles has served us well. During a period when many investors have faced total loss due to: unmitigated custodial risk in the case of Celsius Network; misunderstanding of risk premium in the case of Terra (LUNA); or inability to manage their psychological instincts for those who purchased at all-time highs, our firm continues to provide a thoughtful, systematic approach to a dynamic asset class. Our positive performance complemented by muted drawdowns that create opportunities to participate in the powerful recoveries that characterize the asset class.

  • The TrueCode Capital Crypto Momentum Fund returned +23.51% for the month of July 2022.[^1]
  • The strategy is +13.94% YTD[1,2,3] versus -50.1% YTD for Bitcoin[4], a +63.6% outperformance.
  • In June 2022, the fund avoided a -35% drawdown for BTC[4] with a -7% drawdown.[1,4]
  • The crypto bear market has extended to 197 days[4] with many digital assets and cryptocurrency funds experiencing total losses.

Jan 2022-July 2022 Strategy Performance

Jan 2022-July 2022 Strategy Performance

TrueCode Capital Crypto Momentum Fund Performance

Despite the broader cryptocurrency market being in a bear market for 197 days since January 15, 2022[4], our strategy is up 13.94% YTD[1,2,3] versus -50.12% YTD[4] for Bitcoin. Our focus on capital preservation during volatile markets has allowed us to re-enter the market at much better pricing than was available even a few short months ago. By contrast, our Fund experienced a maximum intra-year drawdown of -9.57%[1,2,3], versus the comparable period drawdowns for Bitcoin (-61.95% intra-year[4]) and Ethereum (-76.08% intra-year[4]).

Our Fund’s focus on capital preservation stems from our understanding of the asymmetry of investing losses as compared to investing gains. With our more muted downside exposure, it only took a 10.58% increase in market prices to reclaim our start of year balance, compared with Bitcoin or Ethereum, where it will take 163%-318% in market gains to break even for 2022[4].

Strategy Drawdown Comparison

Strategy Drawdown Comparison - Data from TradingView

The strategy employed by the TrueCode Capital Crypto Momentum fund has outperformed Bitcoin by 63.64% YTD[1,2] and provided a 13.94% YTD[1,2] gain for our investors, meanwhile Bitcoin will require a 1.6x return to reclaim its opening value for the year of $46,230.005 and Ethereum will require a 3x gain to reclaim its opening balance. If this recovery occurs in 2022 or years into the future, our patient and disciplined strategy will seek to participate in the uptrends and preserve capital during the downtrends to create asymmetric returns for our investors.

For more information about the TrueCode Capital Crypto Momentum fund, email info@truecodecapital.com and we will share our full performance data with you.

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Footnotes

  • [1] Results for TrueCode Capital Crypto Momentum Fund from 5/1/2022-Present calculated by fund administrator NAV Consulting
  • [2] Results for incubator account from 12/1/2019 to 4/30/2022 calculated by fund administrator NAV Consulting
  • [3] End of month data calculated by fund administrator NAV Consulting is believed to be accurate, but is unaudited and will not be final for several days
  • [4] Market Data from TradingView.com
  • [5] Market Data from TradingView.com
  • [6] Results for TrueCode Capital Crypto Momentum Fund from 5/1/2022-Present calculated by fund administrator NAV Consulting
  • [7] Results for TrueCode Capital Crypto Momentum Fund from 5/1/2022-Present calculated by fund administrator NAV Consulting

GENERAL DISCLAIMER

This presentation is not an offer to sell securities of any investment fund or a solicitation of offers to buy any such securities. Securities of TrueCode Capital Crypto Momentum Fund LP (the “Fund”) managed by TrueCode Capital LLC (the “General Partner”) are offered to selected investors only by means of a complete offering memorandum and related subscription materials which contain significant additional information about the terms of an investment in the Fund (such documents, the “Offering Documents”). Any decision to invest must be based solely upon the information set forth in the Offering Documents, regardless of any information investors may have been otherwise furnished, including this presentation.

Joshua Peck (the “Principal”) has developed, tested, and refined an algorithmic investment strategy through investments in an incubator account that is separate from the Fund (the “Incubator Account”). The Incubator Account began trading on or around December 19, 2019 and has been trading ever since. The Principal modified the trading strategy of the Incubator Account on or around May 12, 2020 (the “Adaptive Risk Revision”) and February 23, 2021 (the “Asset Selection Revision”). All performance data shown in this presentation is that of the Incubator Account, net of fees at the highest level that the Fund will charge, and was calculated and reviewed by NAV Consulting, INC. Although the Fund’s strategy will be based off of the Asset Selection Revision to the Incubator Account trading strategy, there is no guarantee that the Fund’s performance will mimic that of the Incubator Account.

An investment in any strategy, including the strategy described herein, involves a high degree of risk. There is no guarantee that the investment objective will be achieved. Past performance of these strategies is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk including the loss of principal. Securities of the Fund are not registered with any regulatory authority, are offered pursuant to exemptions from such registration, and are subject to significant restrictions.

The information in this presentation was prepared by the General Partner and is believed by the General Partner to be reliable and has been obtained from public sources believed to be reliable. General Partner makes no representation as to the accuracy or completeness of such information. Opinions, estimates and projections in this presentation constitute the current judgment of General Partner and are subject to change without notice. Any projections, forecasts and estimates contained in this presentation are necessarily speculative in nature and are based upon certain assumptions. It can be expected that some or all of such assumptions will not materialize or will vary significantly from actual results. Accordingly, any projections are only estimates and actual results will differ and may vary substantially from the projections or estimates shown. This presentation is not intended as a recommendation to purchase or sell any commodity or security. The General Partner has no obligation to update, modify or amend this presentation or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, project on, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

This presentation is strictly confidential and may not be reproduced or redistributed in whole or in part nor may its contents be disclosed to any other person without the express consent of the General Partner.

Disclosure # 1:

The description herein of the approach of the General Partner and the targeted characteristics of its strategies and investments is based on current expectations and should not be considered definitive or a guarantee that the approaches, strategies, and investment portfolio will, in fact, possess these characteristics. In addition, the description herein of the Fund’s risk management strategies is based on current expectations and should not be considered definitive or a guarantee that such strategies will reduce all risk. These descriptions are based on information available as of the date of preparation of this document, and the description may change over time. Past performance of these strategies is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk including the loss of principal.

Disclosure #2:

Certain scenarios described herein are for illustrative purposes only and the assets described are not actual assets held by the Fund. These scenarios show the Principal’s investment in the Incubator Account. Inclusion of such scenarios is not intended as a recommendation to purchase or sell any assets and performance of the Incubator Account in these scenarios does not guarantee that the Fund will experience similar investment results or earn any money whatsoever.

Disclosure #3:

Performance results are that of the Incubator Account and are presented for information purposes only and reflect the impact that material economic and market factors had on the Principal’s decision-making process. No representation is being made that any investor or portfolio, including the Fund, will or is likely to achieve profits or losses similar to those shown.

The returns shown are net of all fees to the investor, at the highest level the Fund will charge; however, performance of individual investors may vary based upon differing management fee and incentive allocation arrangements, and the timing of contributions and withdrawals. Performance numbers were prepared by the General Partner and have been reviewed by NAV Consulting, INC. Performance estimates are subject to future adjustment and revision. The information provided is historical and is not a guide to future performance. Investors should be aware that a loss of investment is possible.

This presentation cannot and does not guarantee or predict a similar outcome with respect to any future investment. The General Partner makes no implications, warranties, promises, suggestions or guarantees whatsoever, in whole or in part, that by participating in any investment of or with the General Partner you will experience similar investment results and earn any money whatsoever.

Disclosure #4:

Any projections, forecasts and estimates contained in this document are necessarily speculative in nature and are based upon certain assumptions. In addition, matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond the Fund’s control. No representations or warranties are made as to the accuracy of such forward-looking statements. It can be expected that some or all of such forward-looking assumptions will not materialize or will vary significantly from actual results. Accordingly, any projections are only estimates and actual results will differ and may vary substantially from the projections or estimates shown.

Disclosure #5:

The graphs, charts and other visual aids are provided for informational purposes only. None of these graphs, charts or visual aids can and of themselves be used to make investment decisions. No representation is made that these will assist any person in making investment decisions and no graph, chart or other visual aid can capture all factors and variables required in making such decisions.

Disclosure #6:

The summary provided herein of the Fund’s terms and conditions does not purport to be complete. The Fund’s Memorandum should be read in its entirety prior to an investment in the Fund.

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