Sigil Core - our flagship investment strategy explained
We have recently explained our low risk market-neutral Sigil Stable strategy. Now it's time to dive deeper into the heart and soul of Sigil fund - the Sigil Core strategy. The main vision for Sigil is to always provide our investors with seamless and smart exposure to the crypto revolution. Sigil Core is an epitome of that vision - our flagship and most complex strategy.
In a nutshell, Sigil Core is...
- An investment into technology - we see internet of value built on top of blockchain as a natural next step in evolution of technology after hardware, software and the internet of information. This secular trend is poised to stay with us for decades.
- Actively managed - rebalancing, partial hedging, adding and removing positions.
- Earning additional income and rewards - via staking, liquidity mining, yield farming, harvesting funding rates, active participation in invested projects.
- Long crypto - while we may decide to partially rebalance out of some positions, we will always be directionally long on crypto innovation.
- Discretionary - we are frequently making decisions on an ad hoc basis, re-evaluating market structure, dominant narratives and fundamentals of invested projects.
- Long term oriented - holding most of our positions in long term, high conviction bets with 2 - 5 year horizon.
- Outperforming BTC - our goal is to outperform Bitcoin benchmark, our track record so far shows we are succeeding.
- Volatile - since we are exposed to many asymmetric bets and let our winners ride, higher volatility is the price we pay for overperforming.
Sigil Core performance vs BTC in Q1+Q2 2021:
Sigil Core strategy IS NOT...
- Timing the markets - it is not our intention to catch the bottoms and the tops of the market swings. Sigil Core will bring value to its investors over the long term thanks to good fundamental allocations. We are not short term traders.
- Market neutral - we are never flat nor net short.
- Leveraged trading - we do not use leverage apart from very rare exceptions with extremely safe margins.
- Quantitative - while we use data to support our investment thesis, we are always making discretionary decisions.
- Algorithmic - while we may use algorithms and other tools to support our decision making and execution, humans are firmly at the helm.
- Low risk - our performance generally reflects the state of the crypto market, which makes our returns volatile.
How Sigil Core strategy evolved over time
Sigil Core reflects our investment thesis from 2018, but is also flexible enough to react to the ever changing nature of innovation in crypto. In 2018 we were mostly allocated in Bitcoin, Ethereum and tokens of alternative layer one blockchains like Tezos or EOS, and cryptocurrencies such as Monero and Litecoin. When our theses about these projects got invalidated we cut them fast and rotated away from them. We were very bullish on Proof Of Stake and were able to generate additional returns thanks to it. Later in 2019 we started to build up our exposure to DeFi protocols and yield farming, which started with Synthetix. Thanks to this, we were ahead of the market and exceptionally well positioned to harness the opportunity during so called DeFi Summer 2020.
After DeFi Summer exposed some limitations to Ethereum throughput, we were quite early to spot the need for alternative DeFi platforms to complement Ethereum, thus we started accumulating tokens such as Solana (SOL) and Terra (LUNA). We chose those networks, which provide the viable technological and structural alternative to Ethereum blockchain and aren't just more centralized Ethereum copycats.
In 2021 we spotted a new trend - NFTs, especially connected to gaming. We believe crypto gaming will be one of the fastest growing industries in the upcoming decade. We are mostly gaining exposure to this thesis through NFT infrastructure projects but a small part of our portfolio is also allocated directly in NFTs. Apart from #1 Aurorian, we also hold Parallel assets. We are directly in touch with teams of both projects and aim to help them build their crypto gaming visions, given previous poker and gaming experience of some of our team members.
The crypto industry is moving fast and keeps changing under our feet. Thanks to our hands-on approach, risk profile and ability to ride our winners while cutting our losers early, we have been able to capitalize on all the major trends so far.
Catching the new trends early
We expect most of the major trends to continue unfolding over the next decade. We think social DAOs and tokens are another upcoming piece into the overall Web3 puzzle. But it's always the unexpected which shapes the future. We work hard to make sure that whatever the next big thing in crypto is, our investors will always get their fair share of the growing pie early enough.
Thus, the symbol of Sigil Core strategy is an eagle - flying high, observing the big picture, and whenever it spots a movement on the ground, it descends upon its prey with speed and conviction.