Executive Summary
2020’s Q1 opened on a positive note, with Bitcoin at $7,160 before closing the quarter at $7,165.72.
With COVID-19 bringing an unprecedented change to the world economy, it also initiated a flight to safety for investors from all asset classes.
The cryptocurrency market showed a high correlation with equity markets due to a panic induced cash crunch which led investors to rush towards the safety of fiat money. Even the bond market was considered too risky to attract investors in an uncertain environment.
Kintaro Capital anticipated a resilience by Bitcoin in case of a deep correction as compared to other cryptoassets. Expecting Bitcoin’s dominance to rise after a fall in February, Kintaro Capital reallocated its portfolio to be overweight on Bitcoin and to be underweight on altcoins. As the correction in Bitcoin was less severe compared to other crypto-assets, Kintaro Capital expects Bitcoin to outperform the cryptomarket in the near term.
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