Monday, December 4

Exposure to the crypto world breaks Alcalá Multigestion Orichalco

The star fund in Spain, Alcalá Multigestion Orichalco, he has stumbled at the start of 2022. The vehicle became famous for scoring a return of 155 percent in 2020 (in the midst of the outbreak of the coronavirus). And he showed muscle again in 2021, up 55 percent. Instead, in what this year it yields a little more than 8 percent.

The reasons that have caused this stumble of the bottom are related to your investment theme. Alcalá Multigestion Orichalco is characterized by having a strong exposure to blockchain, one of the winning themes, as well as the crypto world.

Its main position is Argo, with a portfolio weight of 14 percent. Argo Blockchain, which is mainly dedicated to mining crypto assets. The Company’s mining infrastructure is located at multiple sites in Quebec, Canada. Argo Blockchain serves clients in the UK.

The value loses almost 18 percent in the first weeks of January, compared to the revaluation it had in 2021 of 122 percent. As second position, with 8 percent, stands out Galaxy Typel, the crypto-asset bank founded by former Goldman partner Mike Novogratz, has also not started the year on the right foot, with its shares plummeting 18 percent, versus 2021 gains of 119 percent.

Asset mining affected by volatility

In this way, the vehicle has been sensitive to the volatility that has hit digital currencies, especially in the face of the crisis in Kazakhstan.

And it is that in Kazakhstan are minedKazakhstan reduces the power of the bitcoin network 18.1 percent of cryptocurrencies. In September 2019, the percentage of cryptocurrencies mined in the country did not reach 1.5 percent.

Until very recently, the first place corresponded to China, a neighboring country of Kazakhstan, which it came to host 75 percent of the cryptocurrencies mined around the world, but the Chinese government’s efforts to set limits ended up taking its toll on the business.

Precisely, the riots in Kazakhstan and the possible intervention of Russia and the United States have caused a drop in the stock market of mining companies, also among the most relevant positions of the vehicle.

Thus, it has positions in the Canadian Hive Blockchain Technologies, que it represents practically 6.5 percent of the portfolio. Bitfarms, one of the latest companies to join the group of unicorns by exceeding 1,000 million dollars in valuation, has a weight in the fund of 4.71 percent and is also dedicated to mining crypto assets. In January it yields 19 percent.

The platform Votager Digital complete the list of top five positions weighing just under 4.5 percent.

Pending the evolution of digital currencies

The fund will be pending the evolution ofthe cryptocurrency market, which is trying to recover losses by looking for resistance zones, although for now the volumes of purchases remain “relatively” low, since the demand has not been able to exceed the offer during the previous sessions, explains Diego Morín, an analyst at IG.

In the case of bitcoin The major cryptocurrency is stuck around $42,000, after bouncing off the critical $40,000 support, staying at the gates of 45,000 dollars, an important level for operators, “so we will see if the demand manages to boost the price of bitcoin,” says Morín.

For his part, andEthereum is trading above the psychological barrier of $3,000, once demand failed to break the $3,300 zone. For now, if we continue to see some “weakness” in price, we are likely to see an approach to the $3,000 support.

Impact on rotation

The turnover of portfolios has also had an influence on this negative evolution at the beginning of the year. Investors are now betting more on cyclicals and value stocks, which should benefit from strong economic growth and strong earnings releases.

in the background too had exhibits in gold and silver. The golden metal benefited in 2020 from volatility and uncertainty, allowing it to assert its status as a safe value. Now, its share price should be pushed up by high levels of inflation.