March was historically a bad month for Bitcoin, but this year, the investment landscape is fundamentally different. What investors can expect in March 2021, and how INVAO is preparing for continued volatility.
February was one of the best months Bitcoin has ever seen. Prices climbed as high as 58,000 USD, marking a new all-time high. Then a major correction brought prices back to 43,000 USD. That’s almost 30 percent in just ten days. This kind of volatility keeps being a challenge for investors and an opportunity for traders.
It’s also a massive opportunity for us at INVAO: Our lead digital asset account’s February performance was 48.91 percent. That is about 10 percent higher than Bitcoin’s February performance and a real-life example of the power of active digital asset management.
March outlook: The trend for Bitcoin is still up
Now on to March, which has historically been a lousy month for Bitcoin. In March 2020, Black Thursday happened, which wiped out almost 60 percent of Bitcoin’s market cap. That was a black swan event, but nearly every other March before that, Bitcoin was in the red as well.
That said, the digital assets trading landscape in 2021 is fundamentally different from previous years. Inflation fears drive investors into uncorrelated cryptocurrencies, new monetary stimulus will further support prices, and Tesla’s 1.5 billion USD Bitcoin investment was probably the biggest marketing stunt for Bitcoin ever.
So despite the historically rather grim March performance, the trend for Bitcoin is still up. BTC closed the month at around 45,000 USD, marking again the highest monthly close ever and the fifth consecutive higher monthly close indicating the bull market is still ongoing.
Active management with a focus on hedging strategies
February’s volatility will continue in March, and most of our budget will go towards hedging algos. We consider a price range from the lowest support at 42,000 USD, January’s all-time high, all the way up to the psychological resistance at 60,000 USD. We will maintain a portfolio of mixed Bitcoin and Altcoin positions in March. Compared to February, we will increase the Altcoin allocation in our portfolio, as we expect Altcoin prices to catch up. Altcoin positions are also a way to balance our risk-exposure by diversifying our portfolio.
Our active risk management approach has generated outstanding results over the past months. With our actively managed portfolios, investors can choose their risk appetite and performance goals, and we set up the portfolio management accordingly. That makes INVAO’s managed accounts the ideal investment tool for high-net-worth investors or businesses that want to include digital assets as part of their treasury mix.
For more information on INVAO’s managed accounts, visit www.invao.org.