Funds Management Monthly Report – June 2023

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Market Commentary


  • June was a turbulent month in cryptocurrency markets although prices were largely unchanged month-on-month. A sell-off in the first half of the month, driven by SEC pressure on the industry and a hawkish Fed, was offset in the second half by optimism around the application for a spot Bitcoin ETF from BlackRock (amongst others), as well as Federal Reserve Chairman Jerome Powell’s affirmation that “crypto is here to stay”.


  • Both the Digital Asset Fund and the Market Neutral Fund performed well over the period with DAF rising 8.54% and MNF 1.51% compared with a rise in BTC of 11.85% and Ethereum 2.09%. Bitcoin continues to lead the market on news specific to itself, which we will cover below.


  • The month started with the approval of the raising of the USA’s debt ceiling, bringing with it market angst as many worried the substantial increase in debt issuance would drain liquidity from the markets. The SEC then charged the two largest cryptocurrency exchanges in the USA (Binance and Coinbase) with not complying to local laws.


  • It seemed the “War on Crypto” by regulators was ramping up again, resulting in a sell-off in the cryptocurrency markets for the first half of the month. We do not believe the SEC is trying to kill the crypto industry as many speculate. We believe they see it as an important catalyst for growth, and so want to take it out of the hands of crypto natives who have an inherent conflict of interest and a proven inability to keep investor money safe, and put it in the hands of incumbent financial institutions with a diverse existing revenue stream which they are not willing to risk through bad behaviour.
BlackRock Files for a Spot Bitcoin ETF
BlackRock Files for a Spot Bitcoin ETF
  • A demonstration of this theory is a total reversal of market sentiment, with the mid-month filing of a spot Bitcoin ETF from the world’s largest asset manager, BlackRock. This was followed by similar moves by Fidelity and other significant traditional finance players. Given the stature and experience of these institutions, we believe these applications will be approved and will bring a strong tailwind to the market up to the first quarter of next year.


  • We note that the SEC has a maximum of 240 days to approve or deny the application and note that if approved on the last day, it would occur 30 days before the next Bitcoin halving. Perfect timing for an ETF launch as interest levels in crypto will be at a maximum around the halving in April 2024. Optimism around the effects of an ETF launched by the biggest players in traditional finance is well founded. It indicates the growing acceptance of digital assets by traditional financial institutions to bring legitimacy and accessibility to cryptocurrencies and validates Bitcoin’s role in diversified portfolios.


  • BlackRock and Fidelity’s involvement serves as validation of the asset class and has the potential to attract a broader range of investors, including institutional players, leading to significant capital inflows which will promote market stability and foster the maturation of the cryptocurrency ecosystem.


  • The BlackRock spot Bitcoin ETF submission carries positive implications for our Grayscale investments in both the Digital Asset Fund and Market Neutral Fund. Since BlackRock’s submission, the Grayscale Bitcoin Trust and Grayscale Ethereum Trust discounts have narrowed, contributing positively to both funds’ overall performances.  Moreover, the selection of Coinbase Custody by BlackRock as the custodian for their proposed spot Bitcoin ETF was seen as a positive sign for Coinbase’s custodial business. This, coupled with Coinbase announcing a buyback of their convertible debt, resulted in an uptick on our Coinbase debt holdings. We expect both of these trends to continue.




The ETF approval and launch adds another string to our bullish view for BTC and digital assets for 2024, and we add it to our catalyst list:

        Bitcoin Halving:

  • A report on the Bitcoin Halving was issued with the last monthly update.

        Spot Bitcoin ETF:

  • Bringing new investors into the market
  • The product has a core focus on low fees and high volumes. As such, at launch we expect the biggest players in wealth management to be aggressively pushing their products and subsequently promoting Bitcoin, adding further attention to the cryptocurrency market as a whole.

        USA Election cycle:

  • The inclusion of cryptocurrency as a core focus during the election cycle underscores the growing recognition of its significance in shaping the future of finance and the broader economy.

         Fed Pivot:

  • Nearing the end of the rate increase cycle, making capital cheaper and risk assets as an investment whole more attractive.


  • Though we expect some volatility through the northern summer months, we do feel that the involvement of the likes of Blackrock and Fidelity in the market can only bolster our case for a strong performance for cryptocurrencies in the last quarter of 2023 and through 2024. For those looking to invest in the space we would suggest averaging in over the coming months in preparation for the catalysts outlined above.



Register your interest in MHC Digital Asset Fund, MHC Market Neutral Fund or in any other of MHC Digital Group’s products by contacting our team at





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