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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Crypto Native Capital 2023 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Crypto Native Capital)

Primary Source Intelligence • Q2 2023 Letter Analysis

Crypto Native Capital Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Crypto Native Capital. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

Positioning StanceConstructive

GeographyGlobal

Digest Analysis

Quick Take

"Crypto Native Capital leverages analytical and behavioral advantages in volatile crypto markets through concentrated Bitcoin/Ethereum exposure and disciplined long-term investing."

Executive Summary

Crypto Native Capital posted a -3.1% return in Q2 2023 versus Bitcoin's +7.1% and S&P's +7.9%, with since-inception returns of +6.5% versus Bitcoin's -24.5%. The fund maintains concentrated exposure with a 75/25 split between Bitcoin/Ethereum and other digital assets, reflecting risk-adjusted positioning during the bear market. Manager Drew outlines the fund's competitive advantages: analytical edge from hands-on blockchain usage and understanding value accrual, plus behavioral advantages from disciplined long-term investing in highly emotional crypto markets that trade 4x more frequently than traditional markets. The strategy focuses on Ethereum's superior monetary policy and economic activity versus alternative layer 1 blockchains. While expecting slight underperformance during bear market depths, the manager anticipates outperformance as on-chain activity returns and markets exit the bear phase, with riskier assets positioned to outperform Bitcoin and Ethereum.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

High conviction demonstrated through concentrated portfolio approach, clear articulation of competitive advantages, and willingness to maintain positioning through bear market. Manager provides specific thesis on Ethereum superiority and detailed framework for edge, showing strong conviction in strategy despite recent underperformance.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager acknowledges being in depths of bear market but expresses constructive view on eventual recovery. Expects portfolio to outperform as markets exit bear phase and on-chain activity returns, showing cautious optimism about future conditions.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Portfolio maintains concentrated exposure with 75/25 split favoring Bitcoin/Ethereum, showing selective risk-taking. Smaller concentrated bets in riskier assets demonstrate willingness to take calculated risks despite bear market conditions.

Capital Deployment

De-riskingDeploying

De-risking (0%)

No specific cash level changes or deployment activity mentioned. Manager describes maintaining current 75/25 allocation split, suggesting stable positioning with no significant capital deployment or withdrawal during the quarter.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Manager expects to maintain current positioning through bear market, with patient capital approach. Anticipates deployment bias will increase as markets recover and on-chain activity returns, showing measured optimism about future deployment.

Language Signal

20%

BearishBullish

Bearish (20%)

Language balances bear market acknowledgment with opportunity framing. Uses terms like competitive advantage, outperform, and potential upside, but tempered by realistic assessment of current challenging conditions.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Manager acknowledges bear market conditions and volatility but frames risks as manageable through disciplined approach. References crypto's extreme volatility (multiple 50-80% drawdowns) but treats this as known characteristic rather than systemic threat.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager sees selective opportunities in crypto markets, particularly in Ethereum versus alternative layer 1 blockchains. Identifies mispricing in Ethereum's monetary policy and economic activity, suggesting moderate opportunity density despite bear market conditions.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Strong emphasis on long-term investing approach with patient capital. Manager discusses multi-year thesis development and willingness to hold through volatility cycles. References focus on things that don't change and systematic long-term advantages, indicating extended time horizon.