Starkiller Capital Says Investing In Crypto Is About 'Survive and Advance'

Investors are ever vigilant for any sign the crypto bear market may be shifting. Bitcoin BTC/USD and Ethereum Classic ETC/USD have both shown positive signs — but what the future holds is the subject of endless speculation.

Starkiller Capital, an institutional investment firm that uses quantitative strategies around blockchain-based digital assets, recently released a report, “Cross-sectional Momentum in Cryptocurrency Markets,” which showed the best indicator of near-term value was longer-term performance.

A spokesperson for Starkiller said in the report: "As we look back at the last 12 months of price action in crypto markets, we can once again confirm — this asset class cannot have the massive returns we’ve witnessed without the massive volume, which makes investing in crypto about one thing — survive and advance.”

If we are indeed still in bear country in the crypto market, then this is the longest crypto bear market on record. The 2013 to 2015 crypto bear market lasted 415 days, a point that was crossed in early January 2023.

Many investors regard surviving the chilly crypto winter as a right of passage. Starkiller’s report indicated that now might be the time for some cautious optimism.

“A year ago was the time to be cautious of trends that had bent over after an enormous run, now is the time to look for an opportunity with major assets down 75%+ and the long tail of coins down 90%+,” Starkiller said.

The report examined the correlation between short-term momentum in blockchain, asserting specifically that digital assets which perform best or worst over a 30-day period tend to continue to outperform/underperform over the subsequent 7-day period.

“While cross-sectional momentum is not the only factor we use in our asset selection models, it represents a significant part of our approach,” Starkiller said.

The company added it hoped its audience “will take the conclusions of this research into consideration and think deeply about the causal variables of the large cross-sectional momentum spread."

Starkiller didn't make larger-than-life speculative claims like adventure-capitalist Tim Draper, who remained stalwart in his prediction of $250,000 Bitcoin in 2023, but the company did leave us with some optimism.

This isn’t just a time to survive, it’s a time to buy.

“Like the other previous drawdown cycles, this one too will eventually end up producing tremendous opportunity to allocate in this asset class,” Starkiller said.

Photo: Pexels from Pixabay